EXECUTION VERSION
AINSWORTH LUMBER CO. LTD.
7.5% SENIOR SECURED NOTES DUE 2017
_________________________
INDENTURE
Dated as of November 27, 2012
_________________________
THE BANK OF NEW YORK MELLON
as
Trustee
THE BANK OF NEW YORK MELLON
as
U.S. Collateral Agent
BNY TRUST COMPANY OF CANADA
as
Canadian Collateral Agent _________________________
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions. .......................................................................................................................... 1
Section 1.02 Other Definitions .............................................................................................................. 32
Section 1.03 Incorporation by Reference of Trust Indenture Act .......................................................... 33
Section 1.04 Rules of Construction ........................................................................................................ 33
Section 1.05 Acts of Holders .................................................................................................................. 34
ARTICLE 2 THE NOTES
Section 2.01 Form and Dating .............................................................................................................. 35
Section 2.02 Execution and Authentication ........................................................................................... 36
Section 2.03 Registrar and Paying Agent .............................................................................................. 36
Section 2.04 Paying Agent to Hold Money in Trust .............................................................................. 37
Section 2.05 Holder Lists....................................................................................................................... 37
Section 2.06 Transfer and Exchange ..................................................................................................... 37
Section 2.07 Replacement Notes ............................................................................................................ 50
Section 2.08 Outstanding Notes ............................................................................................................. 51
Section 2.09 Treasury Notes .................................................................................................................. 51
Section 2.10 Temporary Notes. .............................................................................................................. 51
Section 2.11 Cancellation. ..................................................................................................................... 51
Section 2.12 Defaulted Interest. ............................................................................................................ 52
Section 2.13 CUSIP and Similar Identifying Numbers. ......................................................................... 52
Section 2.14 Additional Amounts. .......................................................................................................... 52
ARTICLE 3 REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee ............................................................................................................. 55
Section 3.02 Selection of Notes to Be Redeemed or Purchased ............................................................ 55
Section 3.03 Notice of Redemption ........................................................................................................ 56
Section 3.04 Effect of Notice of Redemption ......................................................................................... 56
Section 3.05 Deposit of Redemption or Purchase Price ........................................................................ 57
Section 3.06 Notes Redeemed or Purchased in Part ............................................................................. 57
Section 3.07 Optional Redemption ........................................................................................................ 57
Section 3.08 Tax Redemption ................................................................................................................ 58
Section 3.09 Mandatory Redemption ..................................................................................................... 59
Section 3.10 Offer to Purchase by Application of Excess Proceeds ...................................................... 59
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ARTICLE 4 COVENANTS
Section 4.01 Payment of Notes .............................................................................................................. 60
Section 4.02 Maintenance of Office or Agency ..................................................................................... 61
Section 4.03 Reports .............................................................................................................................. 61
Section 4.04 Compliance Certificate ..................................................................................................... 62
Section 4.05 Taxes ................................................................................................................................. 62
Section 4.06 Stay, Extension and Usury Laws ....................................................................................... 63
Section 4.07 Restricted Payments .......................................................................................................... 63
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries .................................................................................................................. 67
Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. ............................................................................................................ 69
Section 4.10 Asset Sales......................................................................................................................... 73
Section 4.11 Transactions with Affiliates .............................................................................................. 77
Section 4.12 Liens .................................................................................................................................. 80
Section 4.13 Business Activities ............................................................................................................. 80
Section 4.14 Corporate Existence ......................................................................................................... 80
Section 4.15 Offer to Repurchase Upon Change of Control ................................................................. 80
Section 4.16 [Reserved] ......................................................................................................................... 82
Section 4.17 Payments for Consent ....................................................................................................... 82
Section 4.18 Additional Note Guarantees ............................................................................................. 82
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries ................................................. 83
Section 4.20 Changes in Covenants When Notes Rated Investment Grade ........................................... 83
ARTICLE 5 SUCCESSORS
Section 5.01 Amalgamation, Merger, Consolidation, or Sale of Assets ................................................ 84
Section 5.02 Successor Corporation Substituted ................................................................................... 87
ARTICLE 6 DEFAULTS AND REMEDIES
Section 6.01 Events of Default ............................................................................................................... 87
Section 6.02 Acceleration ...................................................................................................................... 89
Section 6.03 Other Remedies ................................................................................................................. 90
Section 6.04 Waiver of Past Defaults; Rescission of Acceleration........................................................ 90
Section 6.05 Control by Majority .......................................................................................................... 90
Section 6.06 Limitation on Suits ............................................................................................................ 90
Section 6.07 Rights of Holders to Receive Payment. ............................................................................. 91
Section 6.08 Collection Suit by Trustee. ................................................................................................ 91
Section 6.09 Trustee May File Proofs of Claim. ................................................................................... 91
Section 6.10 Priorities. .......................................................................................................................... 92
Section 6.11 Undertaking for Costs. ...................................................................................................... 92
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ARTICLE 7 TRUSTEE
Section 7.01 Duties of Trustee. .............................................................................................................. 92
Section 7.02 Rights of Trustee. .............................................................................................................. 93
Section 7.03 Individual Rights of Trustee. ............................................................................................. 95
Section 7.04 Trustee’s Disclaimer. ........................................................................................................ 95
Section 7.05 Notice of Defaults. ............................................................................................................ 95
Section 7.06 Reports by Trustee to Holders. ......................................................................................... 95
Section 7.07 Compensation and Indemnity. .......................................................................................... 96
Section 7.08 Replacement of Trustee. .................................................................................................... 96
Section 7.09 Successor Trustee by Merger, etc. .................................................................................... 97
Section 7.10 Eligibility; Disqualification. ............................................................................................. 97
Section 7.11 Preferential Collection of Claims Against Company. ....................................................... 98
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. .......................................... 98
Section 8.02 Legal Defeasance and Discharge. .................................................................................... 98
Section 8.03 Covenant Defeasance. ...................................................................................................... 99
Section 8.04 Conditions to Legal or Covenant Defeasance. ................................................................. 99
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. .......................................................................................... 100
Section 8.06 Repayment to Company. ................................................................................................. 101
Section 8.07 Reinstatement. ................................................................................................................. 101
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders. ........................................................................................... 101
Section 9.02 With Consent of Holders. ................................................................................................ 103
Section 9.03 [Reserved]. ...................................................................................................................... 105
Section 9.04 Revocation and Effect of Consents. ................................................................................ 105
Section 9.05 Notation on or Exchange of Notes. ................................................................................. 105
Section 9.06 Trustee to Sign Amendments, etc. ................................................................................... 105
ARTICLE 10 NOTE GUARANTEES
Section 10.01 Guarantee. ...................................................................................................................... 106
Section 10.02 Limitation on Guarantor Liability. ................................................................................. 107
Section 10.03 Execution and Delivery of Note Guarantee. ................................................................... 107
Section 10.04 [Reserved.] ...................................................................................................................... 108
Section 10.05 Releases. ......................................................................................................................... 108
Section 10.06 Benefits Acknowledged. .................................................................................................. 109
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ARTICLE 11 SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge. ............................................................................................ 109
Section 11.02 Application of Trust Money. ........................................................................................... 110
ARTICLE 12 COLLATERAL AND SECURITY
Section 12.01 The Collateral. ................................................................................................................ 110
Section 12.02 Further Assurances. ........................................................................................................ 111
Section 12.03 After-Acquired Property. ................................................................................................ 111
Section 12.04 Impairment of Security Interest. ..................................................................................... 112
Section 12.05 [Reserved]. ...................................................................................................................... 112
Section 12.06 Release of Liens on the Collateral. ................................................................................. 112
Section 12.07 Authorization of Actions to Be Taken by the Trustee or the Notes Collateral Agent Under the Collateral Documents. ................................................... 113
Section 12.08 Collateral Accounts. ....................................................................................................... 115
Section 12.09 Appointment and Authorization of each of The Bank of New York Mellon and BNY Trust Company of Canada as Notes Collateral Agent. ............................... 115
ARTICLE 13 MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls. ......................................................................................... 117
Section 13.02 Notices. ........................................................................................................................... 117
Section 13.03 Communication by Holders with Other Holders. ........................................................... 118
Section 13.04 Certificate and Opinion as to Conditions Precedent. ..................................................... 118
Section 13.05 Statements Required in Certificate or Opinion. .............................................................. 119
Section 13.06 Rules by Trustee and Agents. .......................................................................................... 119
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders. .............................................................................................................. 119
Section 13.08 Governing Law; Jury Trial Waiver ................................................................................. 119
Section 13.09 Jurisdiction. .................................................................................................................... 120
Section 13.10 No Adverse Interpretation of Other Agreements. ........................................................... 120
Section 13.11 Successors. ...................................................................................................................... 120
Section 13.12 Severability. .................................................................................................................... 120
Section 13.13 Counterpart Originals. ................................................................................................... 121
Section 13.14 Table of Contents, Headings, etc. ................................................................................... 121
Section 13.15 Force Majeure. ............................................................................................................... 121
Section 13.16 U.S.A. Patriot Act. .......................................................................................................... 121
Section 13.17 Intercreditor Agreements. ............................................................................................... 121
EXHIBITS
Exhibit A FORM OF NOTE Exhibit B FORM OF CERTIFICATE OF TRANSFER Exhibit C FORM OF CERTIFICATE OF EXCHANGE
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Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTATION OF GUARANTEE Exhibit F FORM OF SUPPLEMENTAL INDENTURE Exhibit G FORM OF ABL INTERCREDITOR AGREEMENT Exhibit H FORM OF SENIOR INTERCREDITOR AGREEMENT
INDENTURE dated as of November 27, 2012, by and among Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada, the Guarantors (as defined herein), The Bank of New York Mellon, as trustee (in such capacity, the “Trustee”) and as U.S. collateral agent (in such capacity, the “U.S. Collateral Agent”) and BNY Trust Company of Canada, as Canadian collateral agent (in such capacity, the “Canadian Collateral Agent”).
The Company, the Guarantors, the Trustee, the U.S. Collateral Agent and the Canadian Collateral Agent agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein) of the 7.5% Senior Secured Notes due 2017 (the “Notes”):
ARTICLE 1 DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
“ABL Agent” means the agent appointed under any ABL Revolving Credit Facility, or any successor thereto in such capacity.
“ABL Collateral” means the ABL Priority Collateral as defined in the ABL Intercreditor Agreement.
“ABL Obligations” means (i) Indebtedness outstanding under any Credit Facility that is secured by a Permitted Lien described under clause (1)(x) of the definition thereof, and all other Obliga-tions (not constituting Indebtedness) of the Company or any Guarantor under such Credit Facility and (ii) all Bank Product Debt.
“ABL Intercreditor Agreement” shall have the meaning given to such term in the defini-tion of Intercreditor Agreements.
“ABL Revolving Credit Facility” means one or more revolving credit facilities entered in-to by the Company and/or any of the Guarantors after the Issue Date, providing for revolving credit loans, letters of credit and other extensions of credit based on a borrowing base formula, and as it may be amended, restated, amended and restated, supplemented or modified from time to time and any renewal, increase, extension, refunding, restructuring, replacement, refinancing or refinancing through securitiza-tion thereof (whether with the original agent and lenders or another agent or agents or one or more other lenders and whether provided under the original ABL Revolving Credit Facility or one or more other credit or other agreements or indentures); provided that an ABL Revolving Credit Facility can not include any debt facility providing for the issuance of term loans, bonds or any other type of debt other than re-volving credit loans, Hedging Obligations or letters of credit.
“ABL Trigger Period” means the period, if any, during which the Company and/or any of the Guarantors have an ABL Revolving Credit Facility in place.
“Acquired Debt” means, with respect to any specified Person:
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(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such speci-fied Person.
“Additional Notes” means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.
“Affiliate” of any specified Person means any other Person directly or indirectly control-ling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirect-ly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control (other than for purposes of determining an Affiliate of Brookfield Asset Management Inc. for purposes of the definition of “Change of Control,” for which beneficial ownership of greater than 50% of the Voting Stock of a Person will be deemed to be control). For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.
“After-Acquired Property” means any property of the Company or any Guarantor ac-quired after the date of this Indenture that is intended to secure the obligations under this Indenture and the Notes pursuant to this Indenture and the Collateral Documents.
“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.
“Applicable Premium” means, with respect to any Note on any redemption date, the greater of:
(1) 1.0% of the principal amount of the Note; and
(2) the excess of: (a) the present value at such redemption date of (i) the redemption price of the Note at December 15, 2014 (such redemption price being set forth in the table appear-ing in Section 3.07(d) hereof) plus (ii) all required interest payments due on the Note through De-cember 15, 2014 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the principal amount of the Note.
“Applicable Procedures” means, with respect to any transfer or exchange of or for bene-ficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
“Asset Sale” means:
(1) the sale, lease, conveyance or other disposition of any assets or rights by the Company or any of the Company’s Restricted Subsidiaries; provided that the sale, lease, convey-ance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of Sections 4.15 and 5.01 (and not by the provisions of Section 4.10); and
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(2) the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the sale by the Company or any of the Company’s Restricted Subsidiaries of Equity Interests in any of the Company’s Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed to be an As-set Sale:
(1) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than US$5.0 million;
(2) a transfer of assets between or among the Company and its Restricted Subsidiar-ies;
(3) an issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company;
(4) the sale, lease or other transfer of products, services or accounts receivable in the ordinary course of business and any sale or other disposition of damaged, worn-out or obsolete assets in the ordinary course of business (including the abandonment or other disposition of intel-lectual property that is, in the reasonable judgment of the Company, no longer economically prac-ticable to maintain or useful in the conduct of the business of the Company and its Restricted Subsidiaries taken as whole);
(5) licenses and sublicenses by the Company or any of its Restricted Subsidiaries of software or intellectual property in the ordinary course of business;
(6) any surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the ordinary course of business;
(7) the granting of Liens not prohibited by Section 4.12 hereof;
(8) the sale or other disposition of cash or Cash Equivalents;
(9) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted In-vestment;
(10) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary, provided that the Company and its Restricted Subsidiaries receive Fair Market Value for such issuance or sale; and
(11) the sale and leaseback of any assets within 90 days of the acquisition thereof.
“Attributable Debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remain-ing term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be cal-culated using a discount rate equal to the rate of interest implicit in such transaction, determined in ac-cordance with IFRS; provided, however, that if such sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”
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“Authentication Order” means a written order of the Company signed by an Officer di-recting the Trustee to authenticate Notes that may be validly issued under this Indenture.
“Bank Product Debt” means Obligations pursuant to banking services provided to the Company and its Subsidiaries including in connection with credit cards, purchasing cards and stored val-ue cards and treasury management services, cash management, controlled disbursement, automated clear-inghouse transactions, return items, overdrafts and depository network services or similar transactions.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.
“Bankruptcy Law” means the Bankruptcy Code, the BIA, the CCAA, or any other feder-al, state, provincial or foreign law relating to bankruptcy, judicial management, insolvency, winding-up, dissolution, litigation, receivership, reorganization, administration or relief of debtors, in each case as now or hereafter in effect, or any successor thereto.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have benefi-cial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns”, “Beneficially Owned” and “Beneficial Ownership” have a corre-sponding meaning.
“BIA” means the Bankruptcy and Insolvency Act (Canada) as now and hereafter in effect, or any successor statute.
“Board of Directors” means:
(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the Board of Directors of the general partner of the partnership;
(3) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person serving a similar function.
“business day” means any day other than a Saturday, a Sunday or a day on which bank-ing institutions are not required to be open in the State of New York.
“Calculation Date” means the date on which the event for which the calculation of the Consolidated Secured Leverage Ratio or the Fixed Charge Coverage Ratio shall occur.
“Canadian dollars” or “$” means the lawful currency of Canada.
“Canadian Insolvency Proceeding” means (a) any case, action or proceeding before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, in-
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terim receivership, receivership, dissolution, winding-up or relief of debtors, or (b) any general assign-ment for the benefit of creditors, composition, marshalling of assets for creditors or other similar ar-rangement in respect of its creditors generally or any substantial portion of its creditors; in each case cov-ered by clauses (a) and (b) undertaken under Canadian federal, provincial or territorial law, including any proceeding under the BIA or the CCAA and any proceeding under applicable corporate law seeking a compromise or arrangement of any debts of the corporation, or a stay of proceedings to enforce any of the claims of the corporation’s creditors against it.
“Canadian Collateral Agent” means BNY Trust Company of Canada, acting in its capac-ity as Canadian collateral agent under the Collateral Documents, or any successor thereto.
“Canadian Securities Legislation” means all applicable securities laws in each of the provinces of Canada, including, without limitation, the Province of Ontario, and the respective regulations and rules under such laws together with applicable published rules, policy statements, blanket orders, in-struments, rulings and notices of the regulatory authorities in such provinces.
“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with IFRS as in effect on the Issue Date, 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 upon which such lease may be prepaid by the lessee without payment of a penalty.
“Capital Stock” of any Person means:
(1) in the case of a corporation, corporate stock of the specified Person;
(2) in the case of an association or business entity, any and all shares, interests, par-ticipations, rights or other equivalents (however designated) of corporate stock of the specified Person;
(3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests of the specified Person; and
(4) any other interest or participation that confers on another Person the right to re-ceive a share of the profits and losses of, or distributions of assets of, the specified Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock, of the specified Per-son.
“Cash Equivalents” means:
(1) Canadian dollars or United States dollars;
(2) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the Canadian or United States government, maturing within 12 months of the date of acquisition;
(3) certificates of deposit, time deposits and banker’s acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by a commercial bank organized under the laws of Canada or the United States or any province,
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state or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by an Initial Purchaser) not subject to offset rights;
(4) repurchase obligations with a term of not more than 30 days for underlying in-vestments of the types described in clauses (2) and (3) above entered into with any financial insti-tution meeting the qualifications specified in clause (3) above;
(5) commercial paper rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing within nine months after the date of acquisition; and
(6) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to in clauses (1) through (5) of this definition, has net assets of at least US$500.0 million and has the highest rating obtainable from either S&P or Moody’s.
“CCAA” means the Companies’ Creditors Arrangement Act (Canada) as now and hereaf-ter in effect, or any successor statute.
“Change of Control” means the occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or sub-stantially all of the properties or assets of the Company and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Exchange Act)) other than a Principal or a Related Party;
(2) the adoption of a plan relating to the liquidation or dissolution of the Company;
(3) the consummation of any transaction or series of transactions (including, without limitation, any consolidation, amalgamation, arrangement or merger), the result of which is that any Person or group of Persons acting jointly or in concert for purposes of such transaction (other than a Principal or a Related Party) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares; provided that event shall be deemed not to be a Change of Control so long as a Principal and/or a Related Party has the right or ability by voting power or contract to elect or designate for election a majority of the board of directors of the Company; or
(4) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.
“Clearstream” means Clearstream Banking, S.A.
“Collateral ” means all property and assets other than Excluded Assets, whether now owned or hereafter acquired, in which Liens are, from time to time, purported to be granted to secure the Notes pursuant to the Collateral Documents.
“Collateral Account” means any segregated account under the sole control of the Notes Collateral Agent that is free from all other Liens (other than during an ABL Trigger Period and/or a First Lien Trigger Period, Liens securing the ABL Obligations and/or the First Lien Obligations, as applica-ble), and includes all cash and Cash Equivalents received by the Trustee or the Notes Collateral Agent from Asset Sales of Notes Collateral, Recovery Events of Notes Collateral, foreclosures on or sales of
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Notes Collateral or any other awards or proceeds pursuant to the Collateral Documents, including earn-ings, revenues, rents, issues, profits and income from the Collateral received pursuant to the Collateral Documents, and interest earned thereon.
“Collateral Documents ” means the mortgages (including the Mortgages), deeds of trust, deeds to secure debt, security agreements (including the Security Agreements), pledge agreements, agen-cy agreements and other instruments and documents executed and delivered pursuant to this Indenture or any of the foregoing, as the same may be amended, supplemented or otherwise modified from time to time evidencing or creating or purporting to create any security interests in any Collateral in favor of the Notes Collateral Agent for its benefit and for the ratable benefit of the Holders and the Trustee or notice of such pledge, assignment or grant is given.
“Company” means Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada, and any and all successors thereto.
“Consolidated Basis” means the consolidated financial data of the Company and its Sub-sidiaries prepared in accordance with IFRS.
“Consolidated EBITDA” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:
(1) costs of curtailed operations in an aggregate amount not to exceed $5.0 million in any fiscal year; plus
(2) an amount equal to any extraordinary loss plus any net loss realized by the speci-fied Person or any of its Restricted Subsidiaries in connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated Net Income; plus
(3) provision for taxes based on income or profits or capital gains, including, without limitation, foreign, federal, provincial and similar taxes and foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) of the Company and its Restricted Subsidiaries on a Consolidated Basis paid or accrued during such period to the ex-tent the same was deducted and not added back) in computing Consolidated Net Income; plus
(4) the Fixed Charges of the specified Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus
(5) any foreign currency translation losses (including losses related to currency re-measurements of Indebtedness) of the specified Person and its Restricted Subsidiaries for such period, to the extent that such losses were taken into account in computing such Consolidated Net Income; plus
(6) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and (A) all other non-cash charges of the Company and its Restricted Subsidiaries on a Consolidated Basis (in each case ex-cluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash expenditures in any future period) less (B) all non-cash items of income of the Company and its Restricted Subsidiaries on a Consolidated Basis (in each case other than accruals of revenue in the ordinary course of business and other than reversals (to the extent made without any payment in cash) of reserves previously excluded from clause (A)) for such period to the extent that such
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depreciation, amortization and other non-cash charges or expenses were deducted in computing such Consolidated Net Income; plus
(7) any non-recurring fees, charges or other expenses made or incurred in connection with any acquisition, investment, issuance of Equity Interest (including the Rights Offering and Standby Purchase) or incurrence or refinancing of Indebtedness prior to or after the Issue Date, including in connection with the offering of the Notes and entering into an ABL Revolving Credit Facility after the Issue Date, to the extent deducted in computing Consolidated Net Income; plus
(8) any other non-recurring fees, charges or other expenses made or incurred in con-nection with the restructuring charges or reserves (which, for the avoidance of doubt, shall in-clude retention, severance, systems establishment cost, contract termination costs, including fu-ture lease commitments, and costs to consolidate facilities and relocate employees) that were de-ducted in computing Consolidated Net Income; provided, that the aggregate amount of such fees, charges or other expenses may not exceed $5.0 million in any twelve-month period; plus
(9) any cash payment under any employment agreement or employee compensation or benefit plan based on the award of “phantom” stock options or unites or other cash awards un-der any long-term incentive plan of the Company or any of its Restricted Subsidiaries in an ag-gregate amount not to exceed US$7.0 million, to the extent that such payments were deducted in computing such Consolidated Net Income; minus
(10) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business.
Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash expenses of, a Restricted Subsidiary of the Company will be added to Consolidated Net Income to compute Consolidated EBITDA of the Company only to the extent that a corresponding amount would be permitted at the date of determination to be divi-dended, distributed or on lent to the Company by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders (except such restrictions as are permitted under this Indenture).
“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the net income (loss) of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with IFRS and without any reduction in respect of preferred stock dividends; provided that:
(1) all extraordinary gains and losses and all gains and losses realized in connection with any Asset Sale or the disposition of securities or the early extinguishment of Indebtedness, together with any related provision for taxes on any such gain, will be excluded;
(2) the net income or loss of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the specified Person;
(3) solely for the purpose of determining the amount available for Restricted Pay-ments in Section 4.07(a)(4)(iii)(A), the net income of any Restricted Subsidiary (other than any
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Guarantor) of the specified Person will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been ob-tained) or, directly or indirectly, by operation of the terms of its charter or any agreement (other than Credit Facilities whose sole restriction on such declaration or payment occurs only upon the occurrence of or during the existence or continuance of a default or event of default), instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided, however, that Consolidated Net Income will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to the Company in such period in lieu of the net income of such Restricted Subsidiary that would otherwise be excluded, to the extent not already included therein;
(4) the cumulative effect of a change in accounting principles will be excluded;
(5) non-cash gains and losses attributable to movement in the mark-to-market valua-tion of Hedging Obligations or other derivative instruments in accordance with IFRS will be ex-cluded;
(6) any non-cash goodwill or intangible asset impairment charges in accordance with IFRS will be excluded;
(7) non-cash compensation charge or expense, including any such charge or expense arising from grants or repurchases of stock options or restricted stock or other equity-incentive programs for the benefit of officers, directors and employees of the Company, any Restricted Subsidiary or a Parent Entity will be excluded;
(8) any inventory purchase accounting adjustments and any increase in amortization or depreciation or other non-cash charges resulting from the application of purchase accounting in relation to any acquisition that is consummated prior to or after the Issue Date, net of taxes, will be excluded;
(9) any expenses with respect to liability or casualty events or business interruption to the extent covered by insurance with third-party carriers and (i) actually reimbursed to the Company or any of its Restricted Subsidiaries or (ii) with respect to which the Board of Directors of the Company has reasonably determined in good faith that there exists reasonable evidence that such amount will in fact be reimbursed to the Company or any of its Restricted Subsidiaries by the insurer; provided that, in the case of this clause (ii), any such expenses that have been ex-cluded from Consolidated Net Income in accordance with the foregoing shall reduce Consolidat-ed Net Income in any later period in which (x) the claim in respect thereof is denied by the appli-cable insurer in writing or (y) 270 days from the date of the claim for insurance have elapsed without collection of such insurance payments will be excluded; and
(10) any fees and expenses (including any adjustment of estimated payments on earn-outs) incurred during such period, or any amortization thereof for such period, in connection with the Refinancing (as defined in the Offering Memorandum) and any acquisition, Investment, Asset Sale, issuance or repayment of Indebtedness, issuance of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (in each case, including any such transac-tion consummated prior to the Issue Date and any transaction undertaken but not completed) and
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any charges or non-recurring merger costs incurred during such period as a result of any such transaction shall be excluded.
“Consolidated Secured Leverage Ratio” means, with respect to any specified Person on any Calculation Date, the ratio, on a pro forma basis, of (1) the sum of the aggregate outstanding amount of Indebtedness of such Person and its Restricted Subsidiaries secured by a Lien, determined on a consol-idated basis as of the last day of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date, to (2) the Consolidated EBITDA of such Person and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the Calculation Date.
For purposes of calculating the Consolidated Secured Leverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date (each such event, for purposes of this definition, a “pro forma event”), will be calculated giving pro forma effect to any such acquisition, merger, consolidation, related fi-nancing transaction or increase in ownership of Restricted Subsidiaries (and the associated changes in Indebtedness and the change in Consolidated EBITDA resulting therefrom) as if it had occurred on the first day of the four-quarter reference period;
(2) in the event that such Person or any Restricted Subsidiary incurs, assumes, guar-antees, redeems, repays, retires or extinguishes any Indebtedness (other than Indebtedness in-curred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes) or issues, redeems, repays or retires Disqualified Stock or Preferred Stock, in each case, subsequent to the end of the most recent fiscal quarter for which internal financial statements are available but on or prior to or concurrently with the Calculation Date, then the Consolidated Secured Leverage Ratio shall be calculated giving pro forma effect to such incur-rence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebted-ness, or such issuance, redemption, repayment or retirement of Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of such most recent fiscal quarter;
(3) the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with IFRS, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;
(4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and
(6) the U.S. dollar-equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with IFRS, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the U.S. dollar equivalent principal amount of such In-debtedness.
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For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting of-ficer of such Person, and will include the amount of cost savings and operating expense reductions for which specified actions were taken or committed to be taken within 12 months after the closing date of such pro forma event and have been realized or are expected to be realized within 12 months after the closing date of such pro forma event (calculated on a pro forma basis as though such cost savings and op-erating expense reductions had been realized on the first day of such period and as if such cost savings and operating expense reductions were realized during the entirety of such period) relating to such pro forma event, net of the amount of actual benefits realized during such period from such actions; provided that (A) a duly completed certificate signed by the chief financial officer of such Person shall be delivered to the Trustee certifying that and setting forth in detail (x) such cost savings and operating expense reduc-tions are reasonably expected and factually supportable in the good faith judgment of such Person, (y) such actions are to be taken within 12 months after the consummation of the acquisition or disposi-tion, which is expected to result in such cost savings and expense reductions, (B) no cost savings or oper-ating expense reductions shall be added pursuant to this defined term to the extent duplicative of any ex-pense or charges otherwise added to Consolidated EBITDA, whether a pro forma adjustment or other-wise, for such period, (C) the aggregate amount of cost savings and operating expense reductions added pursuant to this definition in any period of four consecutive fiscal quarters shall not exceed US$15.0 million for such period and (D) projected amounts (and not yet realized) may no longer be added in calculating Consolidated EBITDA pursuant to this definition to the extent occurring more than four full fiscal quarters after the specified action take in order to realize such projected cost savings and operating expense reductions.
“Consolidated Total Assets” means the total consolidated assets of the Company and its Restricted Subsidiaries as set forth on the most recent consolidated balance sheet of the Company and its Restricted Subsidiaries.
“continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.
“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this Indenture;
(2) was designated by the Principals; or
(3) was nominated for election or elected or appointed to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination, election or appointment (either by specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director).
“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company; pro-vided however that with respect to presentation of the Notes for maturity, redemption or registration of transfer or exchange, the address shall be initially 101 Barclay Street, 4E, New York, NY 10286, Atten-tion: International Corporate Trust or such other address as may be designated by the Trustee from time to time.
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“Credit Facilities” means, one or more debt facilities (including, without limitation, an ABL Revolving Credit Facility) or commercial paper facilities, in each case, with banks or other institu-tional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, re-funded, replaced in any manner (whether upon or after termination or otherwise and including issuances of debt securities evidenced by notes, debentures, bond or similar instruments) or refinanced in whole or in part from time to time.
“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.
“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 Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto or the related footnote on the face thereof.
“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof 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 consid-eration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate executed by an executive officer of the Company or such Restricted Subsidiary setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale, redemption or repayment of, or with respect to, such Designated Non-Cash Consideration.
“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock sole-ly because the holders of the Capital Stock have the right to require the Company to repurchase such Cap-ital Stock upon the occurrence of a Change of Control or an Asset Sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Sec-tion 4.07 hereof. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that the Company and its Restricted Subsidiaries may be-come obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.
“Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States or the District of Columbia or the laws of Canada or any province of Canada or that guarantees or otherwise provides direct credit support for any Indebtedness of the Company.
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“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“Equity Offering” means a sale either (1) of Equity Interests of the Company by the Company (other than Disqualified Stock and other than to a Subsidiary of the Company) or (2) of Equity Interests of a Parent Entity (other than to the Company or a Subsidiary of the Company) to the extent that the net proceeds therefrom are contributed to the common equity capital of the Company.
“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Assets” means the collective reference to: (i) any fee interest in owned real property if the fair market value of such fee interest is US$5,000,000 or less; (ii) any property or asset to the extent that the grant of a security interest in such property or asset is prohibited by any applicable law, treaty, rule or regulation or court or other governmental authority or requires a consent, approval, license, authorization of, or filing with any governmental authority pursuant to applicable law which has not been obtained; (iii) any trademark or service mark consisting of an “intent to use” application until such time as an amendment to allege use in respect thereof has been accepted by the United States Patent and Trade-mark Office or the Canadian Intellectual Property Office, at which time such trademark or service mark shall cease to be an Excluded Asset; (iv) any equipment of the Company or any Restricted Subsidiary that is subject to a purchase money lien or capital lease permitted under this Indenture to the extent the docu-ments relating to such purchase money lien or capital lease would not permit such equipment to be sub-ject to the Liens created under the Collateral Documents; provided, that immediately upon the ineffec-tiveness, lapse or termination of any such restriction, such equipment shall cease to be an “Excluded As-set”, (v) any leasehold interest in real property with respect to which the Company or any Guarantor is a tenant, (vi) interests in joint ventures that cannot be pledged or a security interest in which cannot be granted without the consent of one or more third parties, (vii) interests in non-Wholly Owned Restricted Subsidiaries which cannot be pledged or a security interest in which cannot be granted without the con-sent of one or more third parties, (vii) the capital stock of not-for-profit subsidiaries, captive insurance subsidiaries and special purpose entities used for permitted securitization facilities, (viii) the capital stock of Immaterial Subsidiaries, (ix) margin stock, (x) any contract, permit or license, the pledge of or granting of a security interest in which would be prohibited by anti-assignment provisions of such contracts, per-mits or licenses or would violate the terms of such contract, permit or license or would invalidate or trig-ger termination of, or create a right of termination under, such contract, permit or license, (xi) intellectual property located outside of the United States and Canada, and (xii) the assets financed with the proceeds of a loan from Deutsche Bank Luxembourg S.A. pursuant to a Loan Agreement No. 1, dated September 6/7, 2006, among the Company, Deutsche Bank Luxembourg S.A. and Deutsche Bank Aktiengesellschaft as amended, modified, supplemented and restated from time to time, consisting primarily of pressing and forming equipment for the second OSB production line in connection with the plant in Grand Prairie, Al-berta; provided, however, that Excluded Assets will not include (a) any proceeds, substitutions or re-placements of any Excluded Assets (unless such proceeds, substitutions or replacements would constitute Excluded Assets), (b) any Excluded Asset referred to in clauses (ii) or (x) to the extent any prohibition in the grant or a security interest is unenforceable against third parties under the PPSA or (c) any asset which secures obligations with respect to the ABL Obligations or the First Lien Obligations.
“Excluded Subsidiaries” means (i) any Immaterial Subsidiary, (ii) any subsidiary that is prohibited by law, regulation or contractual obligation from providing such Guarantee or that would re-quire a governmental (including regulatory) consent, approval, license or authorization in order to provide
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such Guarantee, (iii) not-for-profit subsidiaries, captive insurance subsidiaries and special purpose entities used for permitted securitization facilities and (iv) any subsidiary to the extent that the burden or cost of providing a Guarantee outweighs the benefit afforded thereby as reasonably determined by the Company.
“Existing Indebtedness” means all Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Credit Facilities and the Notes) in existence on the date of this Inden-ture, until such amounts are repaid.
“Fair Market Value” means the value that would be paid by a willing buyer to an unaffil-iated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company (unless otherwise provided in this Indenture).
“First Lien Credit Facility Agent” means the agent appointed under any First Lien Credit Facility, or any successor thereto in such capacity.
“First Lien Credit Facility” means any Credit Facility of the Company and/or any of the Guarantors other than an ABL Revolving Credit Facility.
“First Lien Obligations” means (i) Indebtedness outstanding under any Credit Facility that is secured by a Permitted Lien described under clause (1)(y) of the definition thereof, and (ii) all oth-er Obligations (not constituting Indebtedness) of the Company or any Guarantor under such Credit Facili-ty.
“First Lien Trigger Period” means the period, if any, during which the Company and/or any of the Guarantors have a First Lien Credit Facility in place.
“Fixed Charge Coverage Ratio” means with respect to any specified Person for any peri-od, the ratio of the Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subse-quent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the Calculation Date, then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defea-sance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of such period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date (each such event, for purpos-es of this definition, a “pro forma event”), will be calculated giving pro forma effect to any such acquisition, merger, consolidation, related financing transaction or increase in ownership of Re-stricted Subsidiaries (and the associated changes in Fixed Charges and the change in Consolidat-ed EBITDA resulting therefrom) as if it had occurred on the first day of the four-quarter reference period;
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(2) the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with IFRS, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as determined in ac-cordance with IFRS, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and
(6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the appli-cable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in ex-cess of 12 months).
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting of-ficer of such Person, and will include the amount of cost savings and operating expense reductions for which specified actions were taken or committed to be taken within 12 months after the closing date of such pro forma event and have been realized or are expected to be realized within 12 months after the closing date of such pro forma event (calculated on a pro forma basis as though such cost savings and op-erating expense reductions had been realized on the first day of such period and as if such cost savings and operating expense reductions were realized during the entirety of such period) relating to such pro forma event, net of the amount of actual benefits realized during such period from such actions; provided that (A) a duly completed certificate signed by the chief financial officer of such Person shall be delivered to the Trustee certifying that and setting forth in detail (x) such cost savings and operating expense reduc-tions are reasonably expected and factually supportable in the good faith judgment of such Person, (y) such actions are to be taken within 12 months after the consummation of the acquisition or disposi-tion, which is expected to result in such cost savings and expense reductions, (B) no cost savings or oper-ating expense reductions shall be added pursuant to this defined term to the extent duplicative of any ex-pense or charges otherwise added to Consolidated EBITDA, whether a pro forma adjustment or other-wise, for such period, (C) the aggregate amount of cost savings and operating expense reductions added pursuant to this definition in any period of four consecutive fiscal quarters shall not exceed US$15.0 mil-lion for such period and (D) projected amounts (and not yet realized) may no longer be added in calculat-ing Consolidated EBITDA pursuant to this definition to the extent occurring more than four full fiscal quarters after the specified action take in order to realize such projected cost savings and operating ex-pense reductions.
“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issu-ance costs and original issue discount, non-cash interest payments, the interest component of any
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deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance fi-nancings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates (excluding any interest on alternative fuel mixture tax credits repaid); plus
(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of the Company (other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then cur-rent combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with IFRS; minus
(5) the amortization and write-off of deferred financing costs of Indebtedness.
“Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not a Do-mestic Subsidiary.
“Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.
“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depos-itary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in ac-cordance with Section 2.01, 2.06(b)(3), 2.06(b)(4) or 2.06(d)(2) hereof.
“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America (including any agency or instrumentality thereof) for the payment of which ob-ligations or guarantees the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.
“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limita-tion, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (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).
“Guarantors” means any Subsidiary of the Company that provides a Notes Guarantee on the Issue Date or that executes a Note Guarantee in accordance with the provisions of this Indenture, and
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their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.
“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;
(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person against fluctu-ations in currency exchange rates or commodity prices.
“Holder” means a Person in whose name a Note is registered on the books of the Regis-trar.
“IAI Global Note” means the global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that shall be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.
“IFRS” means, at any time, international financial reporting standards as issued by the In-ternational Accounting Standards Board as in effect at such time. All ratios and computations based on IFRS contained in this Indenture will be computed in conformity with IFRS. For all purposes under this Indenture the treatment of operating leases shall be in accordance with IFRS in effect as of the date of this Indenture.
“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose book value of its total assets, as of that date, is less than US$2,000,000 and whose total revenues for the most recent 12-month period do not exceed US$2,000,000; provided that a Restricted Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise provides direct credit support for any Indebtedness of the Company.
“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker’s acceptances;
(4) representing Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase price of any proper-ty or services due more than six months after such property is acquired or such services are com-pleted; or
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(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accord-ance with IFRS. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebted-ness of any other Person. Indebtedness shall be calculated without giving effect to the effects of any ac-counting standard and related interpretations to the extent such effects would otherwise increase or de-crease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
“Indenture” means this Indenture, as amended or supplemented from time to time.
“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.
“Initial Notes” means the first US$350,000,000 aggregate principal amount of Notes is-sued under this Indenture on the date hereof.
“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.
“Insolvency Proceeding” means:
(a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any grantor including any Canadian Insolvency Proceeding;
(b) any other voluntary or involuntary insolvency or bankruptcy case or proceeding, or any receivership, liquidation or other similar case or proceeding with respect to any grantor or with respect to a material portion of its assets;
(c) any liquidation, dissolution, or winding up of any grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or
(d) any assignment for the benefit of creditors or any other marshaling of assets for creditors of any grantor or other similar arrangement in respect of such grantor’s creditors gener-ally.
“Intercreditor Agreements” means each of (a) the ABL Intercreditor Agreement to be en-tered into during an ABL Trigger Period, substantially in the form of Exhibit G hereto (the “ABL Inter-creditor Agreement”) and (b) the Senior Intercreditor Agreement to be entered into during a First Lien Trigger Period (the “Senior Intercreditor Agreement”), substantially in the form of Exhibit H hereto.
“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to of-ficers and employees made in the ordinary course of business), purchases or other acquisitions for consid-eration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with IFRS. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or
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indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposi-tion, such Person is no longer a Restricted Subsidiary of the Company, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Company’s Investments in such Restricted Subsidiary that were not sold or disposed of in an amount de-termined as provided in the final paragraph of Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary of the Company of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Per-son in an amount determined as provided in the final paragraph of Section 4.07 hereof. Except as other-wise provided in this Indenture, the amount of an Investment will be determined at the time the Invest-ment is made and without giving effect to subsequent changes in value.
“Issue Date” means the date on which the Notes are initially issued.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security in-terest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code or PPSA (or equiva-lent statutes) of any jurisdiction.
“Moody’s” means Moody’s Investors Service, Inc.
“Mortgages” means the mortgages, deeds of trust, deeds to secure debt or other similar documents securing Liens on the Premises, as well as the other Collateral secured by and described in the mortgages, deeds of trust, deeds to secure debt or other similar documents.
“Net Award” means any awards or proceeds in respect of any condemnation or other em-inent domain proceeding relating to any Collateral deposited in the Collateral Account pursuant to the Collateral Documents.
“Net Insurance Proceeds” means any awards or proceeds in respect of any casualty in-surance or title insurance claim relating to any Collateral deposited in the Collateral Account pursuant to the Collateral Documents.
“Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limita-tion, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for ad-justment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with IFRS.
“Non-Recourse Debt” means Indebtedness:
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(1) as to which neither the Company nor any of its Restricted Subsidiaries (a) pro-vides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor or otherwise; and
(2) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary).
“Non-U.S. Person” means a Person who is not a U.S. Person.
“Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture.
“Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.
“Notes Collateral” means the Collateral securing the Notes and the Note Guarantees granted to the holders of the Notes as a first-priority security interest subject to certain Permitted Liens.
“Notes Collateral Agent” means the U.S. Collateral Agent and/or the Canadian Collateral Agent, as the context may require.
“Notes Secured Parties” mean the Notes Collateral Agent, the Holders and the holders of Pari Passu Lien Indebtedness (if any).
“Obligations” means all principal, premium, interest (including any interest and fees ac-cruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under any such proceeding or under applicable state, federal or foreign law), penalties, fees, indemnifica-tions, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, premium, inter-est, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.
“Offering Memorandum” means Company’s Offering Memorandum dated November 14, 2012 relating to the initial offering of the Notes.
“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Ex-ecutive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.
“Officers’ Certificate” means a certificate signed on behalf of the Company by two Of-ficers of the Company, one of whom must be the principal executive officer, the principal financial of-ficer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Sec-tion 13.05 hereof and delivered to the Trustee.
“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.
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“Parent Entity” means any Person so long as such Person directly or indirectly holds 100.0% of the Voting Stock of the Company, measured by voting power rather than number of shares; and at the time such Person acquired such Voting Stock, no Person and no group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision), including any such group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) other than a Principal or a Related Party, shall have Beneficial Ownership, directly or indirectly, 50.0% or more of the Voting Stock of such Person.
“Pari Passu Lien Indebtedness” means any Additional Notes and any additional Secured Indebtedness that is ranked pari passu with the Notes and is permitted to be incurred pursuant to the cov-enant described in Section 4.09; provided that (i) the representative of such Pari Passu Lien Indebtedness executes a joinder agreement to the Security Agreement, Intercreditor Agreements (if any) and, if appli-cable, to the other Collateral Documents, in each case in the form attached thereto, agreeing to be bound thereby and (ii) the Company has designated such Indebtedness as “Pari Passu Lien Indebtedness” there-under.
“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
“Permanent Regulation S Global Note” means a permanent Global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Temporary Regulation S Global Note upon expiration of the Restricted Period.
“Permitted Business” means any business that is the same as, similar in nature to, or rea-sonably related, ancillary or complementary to, or a reasonable extension, development or expansion of, any of the businesses in which the Company and its Restricted Subsidiaries are engaged on the date of this Indenture, in each case, as determined in good faith by the Company which, for the avoidance of doubt, includes the sale of electricity generated by the Company and its Subsidiaries.
“Permitted Investments” means:
(1) any Investment in the Company or in a Restricted Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company; or
(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof;
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(5) any acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company or a Parent Entity;
(6) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of the Company or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar ar-rangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes;
(7) Investments represented by Hedging Obligations;
(8) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits;
(9) Investments consisting of purchases and acquisitions of inventory, supplies, ma-terials and equipment or licenses, contribution or leases of intellectual property, in any case, in the ordinary course of business;
(10) Investments in Permitted Joint Ventures and Unrestricted Subsidiaries in an amount not to exceed, together with the amount of all other Investments outstanding under this clause (10) at the time of such Investment and after giving pro forma effect thereto, US$25.0 mil-lion;
(11) loans or advances to employees made in the ordinary course of business of the Company or any Restricted Subsidiary of the Company in an aggregate principal amount not to exceed US$5.0 million at any one time outstanding;
(12) repurchases of the Notes;
(13) any Guarantee of Indebtedness permitted to be incurred under Section 4.09 here-of other than a Guarantee of Indebtedness of an Affiliate of the Company that is not a Restricted Subsidiary of the Company;
(14) any Investment existing on, or made pursuant to binding commitments existing on, the date of this Indenture and any Investment consisting of an extension, modification or re-newal of any Investment existing on, or made pursuant to a binding commitment existing on, the date of this Indenture; provided that the amount of any such Investment may be increased (a) as required by the terms of such Investment as in existence on the date of this Indenture or (b) as otherwise permitted under this Indenture;
(15) Investments acquired after the date of this Indenture as a result of the acquisition by the Company or any Restricted Subsidiary of the Company of another Person, including by way of a merger, amalgamation or consolidation with or into the Company or any of its Restrict-ed Subsidiaries in a transaction that is not prohibited by Section 5.01 hereof after the date of this Indenture to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(16) other Investments not covered by clauses (1) through (15) above in any Person other than an Affiliate (other than such Persons that are Affiliates of the Company solely by vir-tue of the Company’s Investments in such Persons) of the Company that is not a Subsidiary of the
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Company having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (16) that are at the time outstanding not to exceed the greater of (a) US$25.0 million and (b) 5.0% of Consolidated Total Assets; and
(17) 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.
“Permitted Joint Ventures” means any arrangement with another Person or Persons, structured as an unincorporated joint venture, partnership, association or limited liability company (i) in which the Company or any Restricted Subsidiary owns at least 15% of the outstanding Capital Stock thereof and (ii) which engages only in a Permitted Business.
“Permitted Liens” means:
(1) (x) Liens securing ABL Obligations in respect of Indebtedness incurred pursuant to clause (1) of the definition of “Permitted Debt” and any other ABL Obligations specified in clause (ii) of the definition of “ABL Obligations” in respect of such Indebtedness; provided, how-ever, that (A) any Liens on the Notes Collateral granted pursuant to this clause (1)(x) must be jun-ior in priority to the Liens on such Notes Collateral granted in favor of the Notes Collateral Agent for the benefit of the Trustee and the holders of the Notes pursuant to the Collateral Documents and the terms of such junior interest may be no more favorable to the beneficiaries thereof than the terms contained in the ABL Intercreditor Agreement as in effect from time to time and (B) no other Liens may be granted pursuant to this clause (1)(x) unless the Notes are secured by a se-cond-priority Lien that is junior in priority to the Liens on such Collateral securing such Indebt-edness but senior in priority to any other Liens granted on such Collateral, other than Liens pur-suant to clause (y) hereof, and (y) Liens securing First Lien Obligations in respect of Indebted-ness incurred pursuant to clause (1) of the definition of “Permitted Debt” and any other First Lien Obligations specified in clause (ii) of the definition of “First Lien Obligations” in respect of such Indebtedness; provided, however, that no other Liens may be granted pursuant to this clause (1)(y) unless the Notes are secured by a second-priority Lien that is junior in priority to the Liens on such Collateral securing such Indebtedness but senior in priority to any other Liens granted on such Collateral, other than Liens pursuant to clause (x) hereof;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property or shares of stock of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company or is amalgamated, merged with or into or con-solidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such Person becoming a Restricted Subsidi-ary of the Company or such amalgamation, merger or consolidation and do not extend to any as-sets other than those of the Person that becomes a Restricted Subsidiary of the Company or is amalgamated, merged with or into or consolidated with the Company or any Restricted Subsidi-ary of the Company;
(4) Liens on property (including Capital Stock) existing at the time of acquisition of the property by the Company or any Subsidiary of the Company; provided that such Liens were in existence prior to such acquisition and not incurred in contemplation of, such acquisition;
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(5) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation employment insurance and other similar obligations to secure the performance of tenders, bids, leases, contracts (except those related to borrowed money), statuto-ry obligations, insurance, surety or appeal bonds, workers compensation obligations, performance bonds or other obligations of a like nature (including Liens to secure letters of credit issued to as-sure payment of such obligations) or arising as a result of progress payments under government contracts;
(6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of Section 4.09(b) hereof covering only the assets acquired with or financed by such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly institut-ed and diligently concluded; provided that any reserve or other appropriate provision as is re-quired in conformity with IFRS has been made therefor;
(9) Liens imposed by law, such as builders’, workers’, carriers’, warehousemen’s, suppliers’, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of busi-ness for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding in good faith with an appeal or other appropriate proceedings for review and for which adequate reserves are being maintained, to the extent required by IFRS and in the case of the Notes Collateral, such proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien;
(10) leases or subleases of real estate, survey exceptions, easements 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 or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not individually or in the aggregate ma-terially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(11) Liens created for the benefit of (or to secure) the Notes and the related Note Guarantees to be issued on the date of this Indenture;
(12) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided, however, that:
(a) the new Lien is limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and
(b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or dis-charged with such Permitted Refinancing Indebtedness and (y) an amount necessary to
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pay any fees and expenses, including premiums, related to such renewal, refunding, refi-nancing, replacement, defeasance or discharge;
(13) Liens on insurance policies and proceeds thereof, or other deposits, to secure in-surance premium financings;
(14) filing of Uniform Commercial Code or PPSA financing statements as a precau-tionary measure in connection with operating leases and operating leases of personal property en-tered into in the ordinary course of business and having a term (including renewals) of greater than one year that are deemed to be Liens under applicable law;
(15) bankers’ Liens, rights of setoff, Liens arising out of judgments or awards not constituting an Event of Default and notices of lis pendens and associated rights related to litiga-tion being contested in good faith by appropriate proceedings and for which adequate reserves have been made;
(16) Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;
(17) Liens on specific items of inventory or other goods (and the proceeds thereof) of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or creat-ed in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(18) grants of software and other technology licenses in the ordinary course of busi-ness;
(19) Liens arising out of conditional sale, title retention, consignment or similar ar-rangements for the sale of goods entered into in the ordinary course of business;
(20) Liens in connection with escrow deposits made in connection with any acquisi-tion of assets;
(21) Liens arising in the ordinary course of business in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(22) Liens incurred in the ordinary course of business of the Company or any Re-stricted Subsidiary of the Company with respect to Obligations that do not exceed the greater of (a) US$10.0 million and (b) 2.5% of Consolidated Total Assets at any one time outstanding;
(23) Liens securing Hedging Obligations incurred pursuant to clause (9) of the defini-tion of “Permitted Debt,” so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligations; provided that this clause (23) shall not include any Hedging Obligations in respect of Indebtedness under an ABL Revolving Credit Facility;
(24) Liens on the assets of Restricted Subsidiaries of the Company that are not Guar-antors securing Indebtedness and other obligations of such Restricted Subsidiaries of the Compa-ny permitted to be incurred under this Indenture;
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(25) Liens securing Pari Passu Lien Indebtedness of the Company or any of the Guar-antors, not to exceed, after giving pro forma effect to such Liens and Indebtedness, the greater of (x) US$50.0 million and (y) the maximum amount that would not result in the Consolidated Se-cured Leverage Ratio of the Company being greater than 3.0 to 1.0 as of the end of the Compa-ny’s most recently ended four full fiscal quarters for which internal financial statements are avail-able immediately preceding such incurrence;
(26) any extension, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses (1) through (25); provided that any such extension, renewal or replace-ment shall be no more restrictive in any material respect than the Lien extended, renewed or re-placed and shall not extend to any other property other than such item of property originally cov-ered by such Lien or by improvement thereof or additions or accessions thereto;
(27) leases, licenses, subleases and sublicenses of assets (including, without limita-tion, real property and intellectual property rights) that do not materially interfere with the ordi-nary conduct of the business of the Company or any Restricted Subsidiary;
(28) covenants, conditions, restrictions, agreements, easements and other matters of record affecting title to the real property provided that they have been complied with and do not, individually or in the aggregate, materially and adversely impair the current use and operation thereof (assuming its continued use in the manner in which it is currently used);
(29) any unregistered easements, rights-of-way or other unregistered interests or claims not disclosed by the records of the land registry or land titles division in which the real property is located but which are granted by or prescribed by law, have been complied with, or which do not individually or in the aggregate materially and adversely impair the current use and operation of the real property;
(30) such defects, imperfections or irregularities of title or Liens (including, by way of example, encroachments and other matters which would be revealed by an up-to-date survey) as do not, individually or in the aggregate, materially and adversely impair the current use and oper-ation of the real property;
(31) agreements with any municipal, provincial or federal governments or authorities and any public utilities or private parties pertaining to the use, development, redevelopment and/or operation of the real property and any security granted in connection therewith;
(32) standard statutory limitations, conditions and exceptions to title and any rights re-served or vested in any Person by any original patent or grant or any statutory provision provided that they have been complied with and do not, individually or in the aggregate, materially and ad-versely impair the current use and operation thereof (assuming its continued use in the manner in which it is currently used); and
(33) native land claims.
“Permitted Payments to a Parent Entity” means, without duplication as to amounts, (i) payments to any Parent Entity to permit such Parent Entity to pay general corporate operating and over-head costs of such Parent Entity, including reasonable accounting, legal and administrative expenses fran-chise and similar taxes, fees, other expenses and indemnification claims made by directors and officers, and costs with respect to filings with the Securities and Exchange Commission, if any, to the extent such expenses are attributable to the ownership and operation of the Company and its Subsidiaries and (ii)
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payments to any Parent Entity to permit such Parent Entity to pay advisory, consulting or other fees to the Principals; provided that the aggregate amount of all such payments pursuant to clause (i) and (ii) shall not exceed $2.0 million in any fiscal year.
“Permitted Redeemable Stock” means any Disqualified Stock of the Company issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness (other than intercompany indebtedness) or other Disqualified Stock or Permitted Redeema-ble Stock of the Company; provided that:
(1) the stated redemption value of such Permitted Redeemable Stock does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, or the stated redemp-tion value of the Disqualified Stock being extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on such Indebtedness or dividends on or other payments in re-spect of such Disqualified Stock, and the amount of all expenses and premiums incurred in con-nection therewith); and
(2) such Permitted Redeemable Stock has:
(a) a final maturity date or mandatory redemption date later than
(i) the final maturity date of the Indebtedness being extended, re-financed, renewed, replaced, defeased or refunded; or
(ii) the maturity date or mandatory redemption date of the Disquali-fied Stock being extended, refinanced, renewed, replaced, defeased or refunded; and
(b) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness or the Disqualified Stock being extended, refinanced, renewed, replaced, defeased or refunded;
provided further that if such Permitted Redeemable Stock permits the holders thereof to require the Com-pany to repurchase or redeem such Permitted Redeemable Stock at the option of the holder prior to the final maturity of the Notes, then the terms of such Permitted Redeemable Stock shall also provide that the Company may not repurchase or redeem any such Permitted Redeemable Stock pursuant to such provi-sions unless such repurchase or redemption complies with Section 4.07 hereof.
“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of the Company or any of its Restricted Sub-sidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such Permitted Refi-nancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all ac-crued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity that is (a) equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, re-
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financed, replaced, defeased or discharged or (b) more than 90 days after the final maturity date of the Notes;
(3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebt-edness is subordinated in right of payment to the Notes on terms at least as favorable to Holders as those contained in the documentation governing the Indebtedness being renewed, refunded, re-financed, replaced, defeased or discharged; and
(4) such Indebtedness is incurred either by the Company or by the Restricted Subsid-iary of the Company that was the obligor on the Indebtedness being renewed, refunded, re-financed, replaced, defeased or discharged and is guaranteed only by Persons who were obligors on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.
“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other enti-ty.
“PPSA” shall mean the Personal Property Security Act (Ontario) and to the extent appli-cable based on the location of the personal property and the application of applicable conflicts rules, any other applicable Federal, Provincial or Territorial statute pertaining to the granting, perfecting, priority or ranking of security interests, liens or hypothecs on personal property (including the Civil Code (Quebec)), and any successor statutes, together with any regulations thereunder, in each case as in effect from time to time.
“Principals” means (i) Brookfield Asset Management Inc. and its Affiliates (including, without limitation, any investment partnership managed by any of them) and (ii) any officer, director, employee, partner, member or stockholder of the manager or general partner of the foregoing Persons.
“Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
“Qualifying Equity Interests” means Equity Interests of the Company other than Disqual-ified Stock.
“Recovery Event” means any event, occurrence, claim or proceeding that results in any Net Award or Net Insurance Proceeds being deposited into the Collateral Account pursuant to the Collat-eral Documents.
“Regulation S” means Regulation S promulgated under the Securities Act.
“Regulation S Global Note” means a Temporary Regulation S or Permanent Regulation S Global Note, as applicable.
“Related Party” means:
(1) immediate family member (in the case of an individual) of any Principal; or
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(2) any trust, corporation, partnership, limited liability company or other entity, in-cluding any Parent Entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause (1).
“Responsible Officer,” when used with respect to the Trustee or the Notes Collateral Agent, as applicable, means any officer within the corporate trust administration of the Trustee or Notes Collateral Agent, as applicable, (or any successor group thereto) or any other officer of the Trustee in-cluding any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of the Trustee or Notes Collateral Agent, as applicable, who customarily performs functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other such officer to whom such matter is referred because of his knowledge of and fa-miliarity with the particular subject and who shall have direct responsibility for the administration of this Indenture or the Security Agreement.
“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Leg-end.
“Restricted Global Note” means a Global Note bearing the Private Placement Legend.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Period” means the 40-day distribution compliance period as defined in Regu-lation S.
“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
“Rights Offering and Standby Purchase” means the rights offering by the Company to its shareholders and the purchase by Brookfield Asset Management Inc. or one of its Affiliates of all of the common shares of the Company that are not otherwise purchased in such rights offering pursuant to the Amended and Restated Standby Purchase Agreement dated as of November 1, 2012 between the Compa-ny and Brookfield Asset Management Inc., and the transactions related thereto, in each case on the terms and conditions described in the Offering Memorandum in all material respects.
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Rule 144A” means Rule 144A promulgated under the Securities Act.
“Rule 903” means Rule 903 promulgated under the Securities Act.
“Rule 904” means Rule 904 promulgated under the Securities Act.
“SEC” means the Securities and Exchange Commission.
“Secured Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries secured by a Lien (including, without limitation, Capital Lease Obligations).
“Securities Act” means the Securities Act of 1933, as amended.
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“Security Agreement” (i) the security agreement by and between the Company, Ains-worth Corp. and the U.S. Collateral Agent, dated as of the Issue Date, as amended supplemented or oth-erwise modified from time to time (the “U.S. Security Agreement”) and/or (ii) (x) the security agreement by and between the Company and the Canadian Collateral Agent and (y) the security agreement by and between the Guarantors organized under any jurisdiction in Canada and the Canadian Collateral Agent, each dated as of the Issue Date, each as amended supplemented or otherwise modified from time to time (the “Canadian Security Agreement”), as the context may require.
“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 date of this Indenture.
“S&P” means Standard & Poor’s Ratings Group.
“Stated Maturity” means, with respect to any installment of interest or principal or other distribution on any Indebtedness or any Disqualified Stock, the date on which the payment thereof was scheduled to be paid in the documentation governing such Indebtedness or Disqualified Stock as in effect on the date of its issuance, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the dates originally scheduled for the payment thereof.
“Subsidiary” means, with respect to any specified Person:
(1) any corporation, association or other business entity (other than a trust) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited part-nership 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.
“Temporary Regulation S Global Note” means a temporary Global Note in the form of Exhibit A hereof bearing the Global Note Legend, the Private Placement Legend, and the Temporary Regulation S Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reli-ance on Rule 903.
“Temporary Regulation S Legend” means the legend set forth in Section 2.06(g)(3).
“Term Agent” means, collectively, the Notes Collateral Agent and the First Lien Credit Facility Agent and any authorized agent or trustee of holders of Pari Passu Lien Indebtedness.
“Term Secured Parties” means collectively, the Notes Secured Parties, including the holders of the Pari Passu Lien Indebtedness and the holders of First Lien Obligations.
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“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).
“Treasury Rate” means, as of any redemption date, the yield to maturity as of such re-demption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such Federal Reserve Statistical Release H.15 (519) is no longer published, any publicly available source of similar market data)) most nearly equal to the pe-riod from the redemption date to December 15, 2014; provided, however, that if the period from the re-demption date to December 15, 2014, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“Trustee” has the meaning provided in the preamble hereto until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not re-quired to bear the Private Placement Legend.
“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.
“Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary of the Company pursuant to a reso-lution of the Board of Directors, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by Section 4.11 hereof, is not party to any agreement, con-tract, arrangement or understanding with the Company or any Restricted Subsidiary of the Com-pany unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.
“U.S. Collateral Agent” means The Bank of New York Mellon, acting in its capacity as U.S. collateral agent under the Collateral Documents, or any successor thereto.
“U.S. dollars” or “US$” means the lawful currency of the United States of America.
“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Se-curities Act.
“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
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“Weighted Average Life to Maturity” means:
(1) when applied to any Indebtedness at any date, the number of years obtained by dividing:
(a) the sum of the products obtained by multiplying (x) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(b) the then outstanding principal amount of such Indebtedness; and
(2) when applied to any Disqualified Stock (including any Permitted Redeemable Stock) at any date, the number of years obtained by dividing:
(a) the sum of the products obtained by multiplying (x) the amount of each then remaining installment, sinking fund, serial maturity, stated redemption value or other payments in respect of such Disqualified Stock or Permitted Redeemable Stock, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(b) the then outstanding stated redemption value of such Disqualified Stock.
“Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Sub-sidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or Investments by foreign nationals mandated by applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Per-son and one or more Wholly Owned Restricted Subsidiaries of such Person.
Section 1.02 Other Definitions
Term Defined in
Section
“Additional Amounts” ........................................................................................ 2.14 “Affiliate Transaction” ...................................................................................... 4.11 “Alternate Offer” ............................................................................................... 4.15 “Asset Sale Offer” .............................................................................................. 3.10 “Asset Sale Offer Amount” ................................................................................ 4.10 “Asset Sale Offer Period” .................................................................................. 4.10 “Asset Sale Purchase Date” .............................................................................. 4.10 “Authorized Agent” ............................................................................................ 13.09 “Canadian Commissions” .................................................................................. 4.03 “Canadian Securities Laws” .............................................................................. 4.03 “Change in Tax Law” ........................................................................................ 3.08 “Change of Control Offer” ................................................................................ 4.15 “Change of Control Payment” ........................................................................... 4.15 “Change of Control Payment Date” .................................................................. 4.15 “Code” ............................................................................................................... 2.14 “Collateral Disposition Offer” .......................................................................... 4.10
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Term Defined in
Section
“Covenant Defeasance” ..................................................................................... 8.03 “DTC” ................................................................................................................ 2.03 “Event of Default” ............................................................................................. 6.01 “Electronic Methods” ........................................................................................ 13.02 “Excess Collateral Proceeds”............................................................................ 4.10 “Excess Proceeds” ............................................................................................. 4.10 “Excluded Holder” ............................................................................................ 2.14 “Financial Reports” ........................................................................................... 4.03 “incur” ............................................................................................................... 4.09 “Legal Defeasance” ........................................................................................... 8.02 “Offer Amount” .................................................................................................. 3.10 “Offer Period” ................................................................................................... 3.10 “Pari Passu Indebtedness” ................................................................................ 4.10 “Paying Agent” .................................................................................................. 2.03 “Payment Default” ............................................................................................ 6.01 “Permitted Debt” ............................................................................................... 4.09 “Purchase Date” ................................................................................................ 3.10 “Registrar” ........................................................................................................ 2.03 “Restricted Payments” ....................................................................................... 4.07 “Successor Company” ...................................................................................... 5.01 “Successor Guarantor” ...................................................................................... 5.01 “Tax Act” ........................................................................................................... 2.14 “Tax Jurisdiction”.............................................................................................. 2.14 “Taxes” .............................................................................................................. 2.14
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
“indenture securities” means the Notes;
“indenture security Holder” means a Holder of a Note;
“indenture to be qualified” means this Indenture;
“indenture trustee” or “institutional trustee” means the Trustee; and
“obligor” on the Notes and the Note Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined by TIA refer-ence to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in ac-cordance with IFRS;
(3) “or” is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) “will” shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
(7) references to sections of or rules under the Securities Act will be deemed to in-clude substitute, replacement of successor sections or rules adopted by the SEC from time to time;
(8) “including” means including without limitation;
(9) unless the context otherwise requires, any reference to an “Article,” “Section,” “subsection” or “clause” refers to an Article, Section, subsection or clause, as the case may be, of this Indenture;
(10) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivi-sion; and
(11) all references to principal, interest and premium herein are deemed to include Additional Amounts, if applicable.
Section 1.05 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become ef-fective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.05.
(b) The fact and date of the execution by any Person of any such instrument or writ-ing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual sign-ing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.
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(c) The ownership of Notes shall be proved by the Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.
(e) The Company may, at its option in the circumstances permitted by the TIA, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, au-thorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders, but the Company shall have no obligation to do so.
(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.
(g) Without limiting the generality of the foregoing, a Holder, including the Deposi-tary, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, au-thorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and the Depositary may provide its proxy to the beneficial owners of interests in any such Global Note through such Depositary’s standing instructions and customary practices.
(h) The Company may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such Depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, de-mand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such re-quest, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Hold-ers remain Holders after such record date.
ARTICLE 2 THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee’s certificate of authentication will be sub-stantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements re-quired by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be in denominations of US$2,000 and integral multiples of US$1,000 in excess of US$2,000.
The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Howev-er, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the pro-visions of this Indenture shall govern and be controlling.
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(b) Global Notes. Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of out-standing Notes represented thereby may from time to time be reduced or increased, as appropriate, to re-flect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any in-crease or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions giv-en by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the “Op-erating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clear-stream will be applicable to transfers of beneficial interests in the Regulation S Global Note that are held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
At least one Officer must sign the Notes for the Company by manual or facsimile signa-ture.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee will, upon receipt of an Authentication Order, authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes. The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company to authenti-cate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each ref-erence in this Indenture to authentication by the Trustee includes authentication by such agent. An au-thenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be presented for regis-tration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any addi-tional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent,
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the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Regis-trar.
The Company initially appoints The Depository Trust Company (“DTC”) to act as De-positary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, interest or premium on the Notes, and will notify the Trustee in writing of any default by the Company in making any such payment. While any such default contin-ues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it will segregate and hold in a sepa-rate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven busi-ness 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 and the Company shall otherwise comply with TIA § 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. A Global Note (or a beneficial interest therein) is exchangeable for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary that it is unwill-ing or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Com-pany within 90 days after the date of such notice from the Depositary;
(2) subject to the Depositary’s rules, the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and de-livers a written notice to such effect to the Trustee;
(3) upon the written request of a Holder or the Company, after there has occurred and is continuing a Default or Event of Default with respect to the Notes; or
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(4) at the written request of a Holder or beneficial owner with the consent of the Company.
Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in ac-cordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer re-strictions set forth in the Private Placement Legend; provided, however, that prior to the expira-tion of the Restricted Period, transfers of beneficial interests in the Temporary Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (oth-er than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be trans-ferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Sec-tion 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar ei-ther:
(A) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the De-positary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or
(B) both:
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(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the De-positary to cause to be issued a Definitive Note in an amount equal to the benefi-cial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in 2.06(b)(1) above.
Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securi-ties Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Ex-hibit B hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhib-it B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Glob-al Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Glob-al Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Sec-tion 2.06(b)(2) above and:
(A) such transfer is effected pursuant to a shelf registration statement; or
(B) the Registrar receives the following:
(i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take de-livery thereof in the form of a beneficial interest in an Unrestricted Global Note,
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a certificate from such holder in the form of Exhibit B hereto, including the certi-fications in item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the Registrar so requests or if the Ap-plicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Reg-istrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (A) or (B) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Au-thentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Un-restricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of bene-ficial interests transferred pursuant to subparagraph (A) or (B) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or trans-ferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial inter-est for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the ef-fect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an Institutional Accredited In-vestor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
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(F) if such beneficial interest is being transferred to the Company or any of its Sub-sidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, includ-ing the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced ac-cordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall au-thenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. Following receipt of a delivery order in writing by the Company to the Trustee, the Trustee shall make available for delivery, at the expense of the Company, such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all re-strictions on transfer contained therein.
(2) Beneficial Interests in Temporary Regulation S Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C), a beneficial interest in the Temporary Regulation S Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to the expiration of the Restricted Period.
(3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery there-of in the form of an Unrestricted Definitive Note only if:
(A) such transfer is effected pursuant to a shelf registration statement; or
(B) the Registrar receives the following:
(i) if the holder of such beneficial interest in a Restricted Global Note pro-poses to exchange such beneficial interest for an Unrestricted Definitive Note, a certifi-cate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a Restricted Global Note pro-poses to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the Registrar so requests or if the Ap-plicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Reg-istrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
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(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes deliv-ery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropri-ate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will be registered in such name or names and in such authorized denomination or de-nominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. Following a delivery order in writing by the Company to the Trustee, the Trustee shall make available for delivery, at the expense of the Com-pany, such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the Pri-vate Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an Institutional Accred-ited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
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(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unre-stricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:
(A) such transfer is effected pursuant to a shelf registration statement; or
(B) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unre-stricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, in-cluding the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such ex-change or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and in-crease or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (2)(A), (2)(B) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the princi-pal amount of Definitive Notes so transferred.
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(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of trans-fer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes du-ly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted De-finitive Note may be transferred to and registered in the name of Persons who take delivery there-of in the form of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifi-cations in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certifi-cate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted De-finitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Defini-tive Note if:
(A) such transfer is effected pursuant to a shelf registration statement; or
(B) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes proposes to ex-change such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhib-it B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (B), if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the ef-fect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
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(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Un-restricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Temporary Regulation S Global Note.
(1) Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Temporary Regulation S Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clear-stream, duly executed by the Company and authenticated by the Trustee as hereinafter provided.
(2) During the Restricted Period, beneficial ownership interests in Temporary Regu-lation S Global Notes may only be sold, pledged or transferred (i) to the Company, (ii) in an offshore transaction in accordance with Rule 904 of Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global Note) or (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States; and beneficial interests in a 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Restricted Period, only if the transferor first delivers to the Trustee a written certificate to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).
(3) The Restricted Period shall be terminated upon the receipt by the Trustee of:
(A) a written certificate from the Depositary, together with copies of certificates from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of each Temporary Regulation S Global Note (except to the extent of any beneficial owners thereof who acquired an interest there-in during the Restricted Period pursuant to another exemption from registration under the Securi-ties Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Private Placement Legend, all as contemplated by this Section 2.06(f) hereof); and
(B) an Officers’ Certificate and Opinion of Counsel from the Company.
(4) Within a reasonable period after expiration or termination of the Restricted Peri-od, beneficial interests in each Temporary Regulation S Global Note shall be exchanged (or deemed to be exchanged) for beneficial interests in a Permanent Regulation S Global Note upon delivery to DTC of the certification of compliance and the transfer of applicable Notes pursuant to the Applicable Procedures. Simultaneously with the authentication of the corresponding Permanent Regulation S Global Note, the Trustee shall cancel the corresponding Temporary Regulation S Global Note. The aggregate principal amount of a Temporary Regulation S Global Note and a Permanent Regulation S Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Deposi-tary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.
(5) Notwithstanding anything to the contrary in this Section 2.06, a beneficial inter-est in the Temporary Regulation S Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule
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903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.
(g) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provi-sions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note and each De-finitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the leg-end in substantially the following form:
“THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, PLEDGED, ENCUMBERED, DISPOSED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (THE “RESALE RESTRICTION TERMINATION DATE”), SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (A) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE), (D) TO AN INSTITUTIONAL 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 TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN US$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE SECURITIES LAWS OF ANY OTHER JURISDICTION (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE
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TO THE COMPANY IF THE COMPANY SO REQUESTS), (F) TO THE COMPANY OR ANY SUBSIDIARY THEREOF OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, ANY APPLICABLE CANADIAN SECURITIES LAWS OR ANY OTHER APPLICABLE JURISDICTION. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS SET FORTH ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THIS SECURITY. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
UNLESS PERMITTED UNDER CANADIAN SECURITIES LAWS, THE HOLDER OF THIS SECURITY MUST NOT TRADE THIS SECURITY IN OR TO A PERSON IN ANY PROVINCE OR TERRITORY OF CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DATE OF THE ISSUANCE OF THIS SECURITY.”
(3) Temporary Regulation S Legend. The Temporary Regulation S Global Note shall bear a legend in substantially the following form:
“EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.
AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL NOTE
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ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).”
(4) OID Legend. Each Note issued hereunder that has more than a de minimis amount of original issue discount for U.S. Federal Income Tax purposes shall bear a legend in substantially the following form:
“THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTES BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO AINSWORTH LUMBER CO. LTD. AT THE FOLLOWING ADDRESS: AINSWORTH LUMBER CO. LTD., 3194 BENTALL IV, P.O. BOX 49307, 1055 DUNSMUIR STREET, VANCOUVER, BRITISH COLUMBIA, CANADA V7X 1L3, ATTENTION: CHIEF FINANCIAL OFFICER.”
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursu-ant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in substantially the following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS
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GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AINSWORTH LUMBER CO. LTD.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.”
(h) Cancellation or Adjustment of Global Notes. At such time as all beneficial inter-ests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order or at the Registrar’s request.
(2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.10, 4.10, 4.15 and 9.05 hereof).
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(3) Neither the Registrar nor the Company will be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(5) Neither the Registrar nor the Company will be required:
(A) to issue, to register the transfer of or to exchange any Notes during a period be-ginning at the opening of business 15 days before the mailing of a notice of redemption of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of such mailing;
(B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of any Note, the Trus-tee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of, interest or premium on, such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Sections 2.02 and 2.06(i) hereof.
(8) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be sub-mitted by facsimile.
(9) Neither the Trustee nor any Agent shall have any obligation or duty to monitor, determine, approve, validate 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 among Participants or beneficial owners of interests 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.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the Trustee re-ceives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met. An indemnity bond must be supplied by the Holder that is sufficient in the judg-ment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenti-
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cating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued here-under.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Sec-tion 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be out-standing because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Sec-tion 3.07(a) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding.
If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceas-es to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue inter-est.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have con-curred in any direction, waiver or consent, Notes owned by the Company or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in ex-change for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation, together with a written direction for such cancellation. The Registrar and Paying Agent will forward to the Trustee
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any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or can-cellation and will dispose of canceled Notes (subject to the record retention requirement of the Exchange Act) in accordance with its customary procedures. Certification of the disposal of all canceled Notes will be delivered to the Company at its written request. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in writing of the amount of de-faulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed or delivered in accordance with the procedures of the Depositary to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
Subject to the foregoing provisions of this Section 2.12 and for greater certainty, 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 2.13 CUSIP and Similar Identifying Numbers.
The Company in issuing the Notes may use "CUSIP"or other similar identifying numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" or other similar identifying numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no repre-sentation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers print-ed on the Notes, and any such redemption shall not be affected by any defect in or omission of such num-bers. The Company will promptly notify the Trustee in writing of any change in the "CUSIP" or other similar identifying numbers.
Section 2.14 Additional Amounts.
Payments made by the Company under or with respect to the Notes or any of the Guarantors un-der or with respect to any Guarantee will be made without withholding or deduction for or on account of any present or future tax, duty, levy, assessment or other governmental charge, including any related in-terest, penalties or addition to tax (“Taxes”) unless the withholding or deduction of such Taxes is then required by law. If any withholding or deduction for, or on account of, any Taxes imposed or levied by or on behalf of (1) any jurisdiction in which the Company or any Guarantor is from time to time organized, engaged in business for tax purposes, or any political subdivision thereof or therein, or (2) any jurisdic-tion from or through which payment is made by or on behalf of the Company or any Guarantor (including the jurisdiction of the paying agent) or any political subdivision thereof or therein (each, a “Tax Jurisdic-tion”) will at any time be required to be made from any payments made by the Company under or with respect to the Notes or any of the Guarantors under or with respect to any Guarantee, the Company or the relevant Guarantor, as applicable, will pay to each Holder such additional amounts (“Additional
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Amounts”) as may be necessary so that the net amount received by such Holder (including the Additional Amounts) after such withholding or deduction will not be less than the amount such Holder would have received if such Taxes had not been withheld or deducted; provided that no Additional Amounts will be payable with respect to a payment to a Holder (to the extent the following exclusions apply, an “Excluded Holder”):
(a) that is subject to such Taxes by reason of it not dealing at arm’s-length (within the mean-ing of the Income Tax Act (Canada) (the “Tax Act”)) with the Company or the Guaran-tors, as applicable, at the time of making such payment,
(b) that is a “specified non-resident shareholder” of the payor, or is not dealing at arm’s length with a “specified shareholder” of the payor, for purposes of the Tax Act, and is subject to such Taxes pursuant to subsection 214(16) of the Tax Act,
(c) that is subject to such Taxes by reason of its carrying on business in or having a present or former connection with a relevant Tax Jurisdiction or any province or territory thereof otherwise than by the acquisition, ownership or disposition of the Notes, the receipt of payments in respect of such Note or a Guarantee or the enforcement thereof,
(d) in respect of such Taxes imposed on or measured by its overall net income or capital, branch taxes or franchise taxes, under the laws of which the Holder is organized, man-aged or controlled or in which it maintains a lending office,
(e) in respect of such Taxes that would not have been so withheld or deducted if the Note had been presented for payment within 30 days after the Company made available to such Holder a payment of principal in accordance with the terms of this Indenture, except to the extent that such Holder would have been entitled to Additional Amounts had the Note been presented on the last day of such 30-day period and no additional withhold-ings or deductions were made as a result of such late presentment,
(f) in respect of any estate, inheritance, gift, transfer, excise, personal property or similar taxes, duties, assessments or other similar governmental charges,
g) if such Holder is a fiduciary or partnership or person other than the sole beneficial owner of such payment and the Taxes giving rise to such Additional Amounts would not have been imposed on such payment had the Holder been the beneficiary, partner or sole bene-ficial owner, as the case may be, of such Note;
h) any U.S. federal withholding taxes imposed under Sections 1471 through 1474 of the In-ternal Revenue Code of 1986, as amended, (the “Code”), any amended or successor ver-sions of such sections and any current or future United States Treasury regulations prom-ulgated thereunder and published administrative guidance with respect thereto;
(i) that, despite being required by law, statute, treaty, regulation or administrative practice of the relevant Tax Jurisdiction as a precondition to exemption from all or part of such Tax-es, failed to comply with a timely request of the Company to provide information con-cerning such Holder’s nationality, residence, entitlement to treaty benefits, identity or connection with a Tax Jurisdiction or to make any timely or valid declaration or similar claim or satisfy any certification, information or other reporting requirement, if and to the extent that due and timely compliance with such request would have reduced or eliminat-ed any Taxes with respect to which Additional Amounts would have otherwise been pay-able to such Holder but for this clause, or
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(j) any combination of the above clauses of this provision.
The Company or the relevant Guarantor will also make such deduction or withholding and remit the full amount deducted or withheld to the relevant authority in accordance with applicable law.
The Company or the relevant Guarantor will furnish to the Trustee, within 60 days after the date the payment of any Taxes are due pursuant to applicable law, copies of tax receipts, if any (or other doc-umentation), evidencing the payments of Taxes made by the Company, or a Guarantor, as the case may be, on behalf of the Holders.
The Company and the Guarantors will indemnify and hold harmless each Holder and, upon written request, reimburse each such Holder for the amount of:
(i) any Taxes that would have given rise to an obligation to pay Additional Amounts levied or imposed and paid by such Holder as a result of any failure of the Company or the rel-evant Guarantor to withhold, deduct or remit to the relevant authority on a timely basis the full amount required under applicable law,
(ii) any liability (including interest, penalties, and expenses) arising therefrom or with re-spect thereto, and
(iii) any Taxes (other than (I) any Taxes excluded from Additional Amounts in clauses (a) through (j) above and (II) any Taxes that are in the nature of taxes on net income, tax-es on capital, franchise taxes, net worth taxes and similar taxes that, in each case, are im-posed by any jurisdiction as a result of the Holder being connected with such jurisdiction or any province or territory thereof otherwise than by the acquisition, ownership or dis-position of the Notes, the receipt of payments in respect of such Note or a Guarantee or the enforcement thereof) imposed with respect to any reimbursement under clause (i) or (ii) above.
In addition, the Company and the Guarantors will pay and indemnify each Holder for any pre-sent or future stamp, issue, registration, transfer, court or documentary taxes, or other excise or property taxes, charges or similar levies (including penalties, interest and any other liabilities related thereto) that are levied by any relevant Tax Jurisdiction on the execution, delivery, issuance or registration of any of the Notes, this Indenture, Guarantee or any other document referred to therein, or the receipt of any pay-ments with respect thereto, or enforcement of, any of the Notes or any Guarantee.
If the Company or any Guarantor becomes aware that it will be obligated to pay Additional Amounts with respect to any payment under or with respect to the Notes or a Guarantee, the Company or such Guarantor, as applicable, will deliver to the Trustee on a date that is at least 30 days prior to the date of that payment (unless the obligation to pay Additional Amounts arises after the 30th day prior to that payment date, in which case the Company or such Guarantor shall notify the Trustee promptly thereafter) an officer’s certificate stating that such Additional Amounts will be payable and the amounts so payable, and will set forth such other information as is reasonably necessary to enable the paying agent to pay such Additional Amounts to the Holders on the payment date.
Whenever in this Indenture there is mentioned, in any context, the payment of principal, premi-um, if any, redemption price, Change of Control Payment, purchase price, interest or any other amount payable under or with respect to any Note, such mention shall be deemed to include mention of the pay-ment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
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The above obligations will survive Articles 8 and 11 hereof and any transfer by a Holder or Beneficial Owner of its Notes, and will apply mutatis mutandis to any jurisdiction in which any successor Person to the Company or any Guarantor is incorporated, engaged in business for tax purposes or resident for tax purposes, or any jurisdiction from or through which such Person makes any payment on the Notes or any Guarantee and, in each case, any department or political subdivision thereof or therein.
ARTICLE 3 REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 5 business days (or such shorter period as is agreed to by the Trustee) before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 but not more than 60 days before a redemption date, an Officers’ Certif-icate setting forth:
(1) the clause of this Indenture pursuant to which the redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price (including the Applicable Premium, if required).
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee will select Notes for redemption or purchase on a pro rata basis subject to Applicable Procedures and the Trustee’s customary practices in effect from time to time (which shall be binding on the Company and all Holders) unless otherwise required by law or applicable stock exchange require-ments or the Applicable Procedures.
In the event of partial redemption or purchase, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes selected for partial redemption or purchase and the principal amount thereof to be redeemed or purchased. Notes and por-tions of Notes selected will be in principal amounts of US$2,000 or integral multiples of US$1,000 in excess of US$2,000; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding principal amount of Notes held by such Holder, even if not a multiple of US$2,000, will be redeemed or purchased and no Notes in principal amounts of US$2,000 or less can be redeemed in part. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.
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Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.10 hereof, at least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, or deliv-ered through the facilities of the Depositary a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed or delivered 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 8 or 11 hereof.
The notice will identify the Notes to be redeemed (including CUSIP numbers) and will state:
(1) the redemption date;
(2) the redemption price (including the Applicable Premium, if required);
(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 col-lect the redemption price;
(6) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Notes or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;
(8) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and
(9) such other matters as the Company deems desirable or appropriate.
At the Company’s written request, the Trustee will give the notice of redemption in the Company’s name and at its expense, provided, however, that the Company has delivered to the Trustee at least 10 days prior to the date of such notice (or such shorter period as is agreed to by the Trustee), a writ-ten request that the Trustee give such notice of redemption and setting forth the information to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed or delivered in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemp-tion price. A notice of redemption may not be conditional.
The notice, if mailed or delivered in a manner herein provided, shall be conclusively pre-sumed to have been given, whether or not the Holder receives such notice. In any case, failure to give
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such notice by mail or delivery or any defect in the notice to the Holder of any Note designated for re-demption in whole or in part shall not affect the validity of the proceedings for the redemption of any oth-er Note. Subject to Section 3.05, on and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.
Section 3.05 Deposit of Redemption or Purchase Price.
Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Com-pany will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will within two business days after that date return to the Company any money de-posited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on, all Notes to be redeemed or purchased.
If the Company 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 on such record date. If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the fail-ure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid princi-pal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any in-terest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder, at the expense of the Company, a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of US$2,000 or an integral multiple of US$1,000 in ex-cess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Au-thentication Order and not an Opinion of Counsel or Officers’ Certificate is required for the Trustee to authenticate such new Note.
Section 3.07 Optional Redemption.
(a) At any time prior to December 15, 2014, the Company may on any one or more occasions redeem up to 40% of the aggregate principal amount of Notes issued under this Indenture (in-cluding Additional Notes), upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 107.500% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the redemption date, in an amount equal to the net cash proceeds of an Equity Offering; provided that:
(1) at least 60% of the aggregate principal amount of Notes originally issued under this Indenture (including any Additional Notes but excluding Notes held by the Company and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
(2) the redemption occurs within 90 days of the date of the closing of such Equity Offering.
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(b) At any time prior to December 15, 2014, the Company may on any one or more occasions redeem all or a part of the Notes, upon not less than 30 days nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Notes and Additional Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest to, but excluding, the date of redemp-tion.
(c) The Company may redeem up to 10% of the aggregate principal amount of the Notes originally issued in any twelve month period commencing with the twelve-month period beginning on the Issue Date and for each twelve month period thereafter through but prior to December 15, 2014, at a redemption price equal to 103% of the principal amount of the Notes redeemed plus accrued and unpaid interest on the Notes to be redeemed to, but excluding, the redemption date.
(d) On or after December 15, 2014, the Company may on any one or more occasions redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest on the Notes redeemed, to, but excluding, the applicable date of redemption, if redeemed during the 12-month period beginning on December 15 of the years indicated below:
Year Percentage
2014 103.750% 2015 101.875% 2016 and thereafter 100.000%
Unless the Company 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.
(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the pro-visions of Sections 3.01 through 3.06 hereof. Except pursuant to this Section 3.07 or Section 3.08 hereof, the Notes will not be redeemable at the Company’s option.
Section 3.08 Tax Redemption.
The Company may at any time redeem, in whole but not in part, the outstanding Notes (upon giving notice of such redemption within 60 days of the announcement of the effectiveness of any change described in clauses (a) or (b) below) at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, and all Additional Amounts (if any) then due and that will become due on the date of redemption as a result of the redemp-tion or otherwise, if on the next date on which any amount would be payable in respect of the Notes, the Company would be or would become obligated to pay any Additional Amounts in respect of the Notes, and the Company cannot avoid any such payment obligation by taking reasonable measures available to it, as a result of:
(a) any change in or amendment to the laws (or regulations promulgated thereunder) of a
relevant Tax Jurisdiction, or (b) any change in or amendment to any official position regarding the application, admin-
istration or interpretation of such laws or regulations,
which change or amendment is announced and is effective on or after the Issue Date (or, if the applicable relevant Tax Jurisdiction became a Tax Jurisdiction on a date after the Issue Date, such later date) (a “Change in Tax Law”). Notice of the Company’s intent to redeem the Notes pursuant to this Section 3.08
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shall not be effective until it delivers to the Trustee (i) an officer’s certificate stating that the Company is or will become obligated to pay Additional Amounts because of a Change in Tax Law, and (ii) an opinion of independent tax counsel to the effect that there has been such a Change in Tax Law.
Section 3.09 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.
Section 3.10 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is required to commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of Pari Passu Lien In-debtedness. The Asset Sale Offer will remain open for a period of at least 20 business days following its commencement and not more than 30 business days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than three business days after the termination of the Of-fer Period (the “Purchase Date”), the Company will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same manner as interest pay-ments are made.
If the Purchase Date is on or after an interest record date and on or before the related in-terest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Hold-ers who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders. The notice will contain all instructions and materi-als necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section 3.10 and Sec-tion 4.10 hereof and the length of time the Asset Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue to accrue inter-est;
(4) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased only in amounts of US$2,000 and integral multiples of US$1,000 in excess of US$2,000;
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(6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Pur-chase” attached to the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the Company, the De-positary or the Paying Agent, as the case may be, receives, not later than the expiration of the Of-fer Period, written 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 his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and other pari passu Indebted-ness surrendered by holders thereof exceeds the Offer Amount, the Company will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis based on the princi-pal amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of US$2,000, or integral multiples of US$1,000 in excess of US$2,000, will be purchased); and
(9) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful, accept for pay-ment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Of-ficers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company (to the extent fully funded by the Company) in accordance with the terms of this Section 3.10. The Com-pany, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price plus interest to, but excluding, the Purchase Date of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trus-tee, upon written request from the Company, will authenticate and mail or deliver (or cause to be trans-ferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased por-tion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.10, any purchase pursuant to this Section 3.10 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4 COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, interest and premium, if any, on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and inter-est, if any will be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 11:00 a.m. (New York City time) on the due date money deposited by the
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Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then appli-cable interest rate on the Notes to the extent lawful; it will 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.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in New York, New York, an office or agency (which may be an office of the Trustee or an Affiliate of the Trustee, Registrar or co-registrar) where Notes may be sur-rendered for registration of transfer or for exchange and where notices and demands to or upon the Com-pany in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Company 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 such designations; provided, however, that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency in New York, New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescis-sion and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports. So long as any Notes are outstanding:
(a) if the Company is subject to the reporting requirements under the securities laws of any province of Canada (“Canadian Securities Laws”) and is required to file information with one or more securities commissions in Canada (the “Canadian Commissions”), the Company will furnish to the holders of the Notes (and beneficial owners of the Notes, to the extent not otherwise available on the Ca-nadian System for Electronic Document Analysis and Retrieval, or SEDAR), on or prior to the due date prescribed by the Canadian Securities Laws:
(1) all quarterly and annual financial information and reports that the Company is re-quired to file with the Canadian Commissions under applicable Canadian Securities Laws; and
(2) all material change reports (other than confidential material change reports) that the Company is required to file with the Canadian Commissions under applicable Canadian Secu-rities Laws; and
will hold a quarterly conference call to discuss the quarterly and annual information in the foregoing re-ports no later than five business days from the release thereof; and
(b) if the Company is not subject to the reporting requirements under Canadian Secu-rities Laws or is otherwise not required to file information with the Canadian Commissions, the Company
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will (i) furnish to the holders, and, upon request, to beneficial owners of the Notes a copy of all of the fi-nancial information and reports referred to in subclauses (i) and (ii) of clause (a) above (the “Financial Reports”) within 15 days after the date such information and reports would be due if the Company was subject to the reporting requirements under Canadian Securities Laws; (ii) hold a quarterly conference call to discuss the quarterly and annual information contained in the Financial Reports no later than five busi-ness days from the time the Company furnishes such information to the holders; (iii) no fewer than three business days prior to the date of the conference call required to be held in accordance with clause (ii) above, issue a press release to the appropriate wire services for broad dissemination in the United States and Canada announcing the time and date of such conference call and directing the beneficial own-ers of the Notes, prospective investors and securities analysts to contact the investor relations office of the Company to obtain the Financial Reports and information on how to access such conference call; and (iv) either (x) maintain an unrestricted public website on which the Financial Reports and conference call access details are posted; (y) maintain a non-public website to which beneficial owners of the Notes, pro-spective investors and securities analysts are given access and to which the Financial Reports and confer-ence call access details are posted or (z) distribute via electronic mail such Financial Reports and confer-ence call details to beneficial owners of the Notes, prospective investors and securities analysts who re-quest to receive such distributions.
(c) The Company will use its commercially reasonable efforts to remain a reporting issuer, within the meaning of applicable Canadian Securities Laws, in good standing in a jurisdiction of Canada.
(d) For so long as any Notes remain outstanding, the Company will furnish to hold-ers of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
In addition, if at any time a Parent Entity becomes a Guarantor (there being no obligation of a Parent Entity to do so), the reports, information and other documents required to be filed and fur-nished to Holders pursuant to this Section 4.03 may, at the option of the Company, be furnished by and be those of such Parent Entity rather than the Company.
Section 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, no later than March 31 of each year, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to de-termining whether the Company has kept, observed, performed and fulfilled its obligations under this In-denture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Com-pany is taking or proposes to take with respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay, prior to delinquen-cy, all material taxes, assessments, and governmental levies except such as are contested in good faith and
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by appropriate proceedings or where the failure to effect such payment is not adverse in any material re-spect to Holders.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that they will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execu-tion of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on ac-count of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and oth-er than dividends or distributions payable to the Company or a Restricted Subsidiary of the Com-pany);
(2) purchase, redeem or otherwise acquire or retire for value (including, without lim-itation, in connection with any merger or consolidation involving the Company) any Equity Inter-ests of the Company or any Parent Entity;
(3) make any payment on or with respect to, or purchase, redeem, defease or other-wise acquire or retire for value any Indebtedness of the Company or any Guarantor that is con-tractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany In-debtedness between or among the Company and any of its Restricted Subsidiaries) or any Dis-qualified Stock of the Company, except (a) a payment required at the Stated Maturity thereof or (b) the purchase, redemption, defeasance or other acquisition or retirement of any such subordi-nated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or payment at final maturity, in each case due within one year; or
(4) make any Restricted Investment
(all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(i) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
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(ii) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applica-ble four-quarter period, have been permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; and
(iii) such Restricted Payment, together with the aggregate amount of all other Re-stricted Payments made by the Company and its Restricted Subsidiaries since the date of this In-denture (excluding Restricted Payments permitted by clauses (2) through (11) and (13) through (15) of paragraph (b) of this Section 4.07), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from October 1, 2012 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such peri-od is a deficit, less 100% of such deficit); plus
(B) 100% of the aggregate net cash proceeds, and the fair market value of any property other than cash, received by the Company since the date of this Indenture (excluding net cash proceeds received from the Rights Offering and Standby Purchase) as a contribution to its common equity capital or from the issue or sale of Qualifying Equity Interests of the Company or from the issue or sale of convertible or exchangeable Disqualified Stock of the Company or convertible or exchangeable debt securities of the Company, in each case that have been converted into or exchanged for Qualifying Equi-ty Interests of the Company (other than Qualifying Equity Interests and convertible or exchangeable Disqualified Stock or debt securities sold to a Subsidiary of the Compa-ny); plus
(C) to the extent that any Restricted Investment that was made after the date of this Indenture is (a) sold for cash or otherwise cancelled, liquidated or repaid for cash, or (b) made in an entity that subsequently becomes a Restricted Subsidiary of the Com-pany, the initial amount of such Restricted Investment (or, if less, the amount of cash re-ceived upon repayment or sale); plus
(D) to the extent that any Unrestricted Subsidiary of the Company designated as such after the date of this Indenture is redesignated as a Restricted Subsidiary after the date of this Indenture, the lesser of (1) the Fair Market Value of the Company’s Re-stricted Investment in such Subsidiary as of the date of such redesignation and (2) such Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the date of this Indenture; plus
(E) any cash dividends or distributions received by the Company or a Re-stricted Subsidiary of the Company that is a Guarantor after the date of this Indenture from an Unrestricted Subsidiary of the Company or any Restricted Investment made af-ter the date of this Indenture, to the extent that such dividends were not otherwise in-cluded in the Consolidated Net Income for such period and were not used to reduce In-vestments made pursuant to the definition “Permitted Investments”.
(b) The provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or giving of the redemption notice, as
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the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of this Indenture;
(2) the making of any Restricted Payment in exchange for, or out of or with the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concur-rent contribution of common equity capital to the Company; provided that the amount of any such net cash proceeds that are used for any such Restricted Payment will not be considered to be net proceeds of Qualifying Equity Interests for purposes of clause (4)(iii)(B) of Section 4.07(a) here-of;
(3) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(4) the repurchase, redemption, defeasance or other acquisition or retirement for val-ue of Indebtedness of the Company or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee or Permitted Redeemable Stock with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness or Permitted Re-deemable Stock;
(5) so long as no Default or Event of Default has occurred and is continuing, the re-purchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company or any distribution, loan or advance to any Parent Entity for the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of such Parent Entity, in each case held by any current or former officer, di-rector or employee of the Company or any of its Restricted Subsidiaries pursuant to any employ-ment agreement that has been approved by the Board of Directors of the Company or any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Eq-uity Interests may not exceed US$2.5 million in any 12-month period, not including payments made by an acquiror upon a Change of Control or in connection with payments made pursuant to any such employment agreement that (a) the Company may carry forward and make in a subse-quent 12-month period, in addition to the amounts permitted for such 12-month period, the amount of such purchases, redemptions or other acquisitions permitted to have been made but not made in any preceding 12-month period up to a maximum of US$7.5 million in any 12-month pe-riod pursuant to this clause (5) and (b) such amount in any 12-month period may be increased by (i) the cash proceeds of key man life insurance policies received by the Company and its Restrict-ed Subsidiaries after the Issue Date and (ii) the aggregate cash proceeds received by the Company during that 12-month period from any re-issuance of Capital Stock by the Company to employ-ees, officers, directors or consultants of the Company and its Restricted Subsidiaries, less any amount previously applied to the payment of Restricted Payments pursuant to this clause (5); provided that any such amount used for any such Restricted Payment will not be considered to be net proceeds of Qualifying Equity Interests for purposes of clause (4)(iii)(B) of Section 4.07(a) hereof;
(6) the repurchase of Equity Interests deemed to occur upon the exercise of stock op-tions, warrants, restricted stock, restricted stock units or performance shares to the extent such Equity Interests represent a portion of the exercise price of those stock options and repurchases of Equity Interests deemed to occur upon the withholding of a portion of Equity Interests granted or
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awarded to an employee to pay for the taxes payable by such employee upon such grant or award (or settlement or vesting thereof);
(7) so long as no Default or Event of Default has occurred and is continuing, the dec-laration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any preferred stock of any Restricted Subsidiary of the Company issued on or after the date of this Indenture in accordance with the Fixed Charge Cov-erage Ratio test described in Section 4.09(a) hereof;
(8) payments of cash, dividends, distributions, advances or other Restricted Pay-ments by the Company or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the issuance of fractional shares upon (i) the exercise of options or warrants, (ii) the settlement or vesting of restricted stock, restricted stock units or performance shares, or (iii) the conversion or exchange of Capital Stock of any such Person;
(9) the defeasance, redemption, repurchase or other acquisition of any Indebtedness of the Company or any Guarantor that is contractually subordinated to the Notes or any Note Guarantee pursuant to provisions substantially similar to those of Sections 3.10, 4.10 and 4.15 hereof; provided, however, that the circumstances giving rise to such defeasance, redemption, re-purchase or other acquisition shall have constituted a Change of Control or required the Company to make an Asset Sale Offer, as applicable, prior to or contemporaneously with such defeasance, redemption, repurchase or other acquisition, the Company shall have complied with all applicable provisions of Sections 3.10, 4.10 and 4.15 hereof and the purchase price therefor shall not be in excess of the percentage of the principal amount thereof applicable to the Notes plus any accrued and unpaid interest thereon;
(10) so long as no Default or Event of Default has occurred and is continuing, other Restricted Payments in an aggregate amount not to exceed US$15.0 million since the date of this Indenture;
(11) the payment of dividends on common stock of the Company or any Parent Entity following the first bona fide underwritten public offering of common stock of the Company or any Parent Entity after the date of this Indenture of up to 6% per annum of the net cash proceeds received by the Company from all such public offerings; provided, however, that the aggregate amount of all such dividends shall not exceed the aggregate amount of net cash proceeds received by the Company from all such public offerings;
(12) Permitted Payments to a Parent Entity;
(13) the distribution, dividend or otherwise, of shares of Capital Stock of or Indebted-ness owed to the Company or a Restricted Subsidiary by Unrestricted Subsidiaries (other than Unrestricted Subsidiaries the primary assets of which are cash and/or Cash Equivalents);
(14) payments made to Brookfield Asset Management Inc. or one of its Affiliates for (i) reimbursement of reasonable management expenses paid by Brookfield on behalf of the Com-pany and (ii) in connection with the Rights Offering and Standby Purchase in an aggregate amount not to exceed $4.375 million; and
(15) so long as the Consolidated Secured Leverage Ratio of the Company is no great-er than 3.0 to 1.0 as of the end of the Company’s most recently ended four full fiscal quarters for which internal financial statements are available, and after giving effect thereto, other Restricted
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Payments in an aggregate amount not to exceed US$100.0 million since the date of this Inden-ture.
The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of any assets or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be deter-mined by the Board of Directors of the Company whose resolution with respect thereto will be delivered to the Trustee. The Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing (in Canada or the United States) if the Fair Market Value exceeds US$10.0 million.
For purposes of determining compliance with this Section 4.07, if any Investment or Re-stricted Payment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of “Permitted Investments,” the Company may be per-mitted to classify such Investment or Restricted Payment, or later reclassify all or a portion of such In-vestment or Restricted Payment, in any manner that complies with this Section 4.07.
If any Person in which an Investment is made, which Investment constitutes a Restricted Payment when made, thereafter becomes a Restricted Subsidiary in accordance with this Indenture, all such Investments previously made in such Person shall no longer be counted as Restricted Payments for purposes of calculating the aggregate amount of Restricted Payments pursuant to this Section 4.07, in each case to the extent such Investments would otherwise be so counted.
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or re-striction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to the Compa-ny or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or re-strictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities as in effect on the date of this Indenture and any amendments, restatements, modifications, renewals, increases, supplements, refundings, replacements or refinancings of those agreements; provided that the amendments, restatements, modifications, renewals, increases, supplements, refundings, replace-ments or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in those agreements on the date of this Indenture;
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(2) this Indenture, the Notes and the Note Guarantees, the Collateral Documents and the Intercreditor Agreements;
(3) agreements governing other Indebtedness or Equity Interests permitted to be in-curred under the provisions of Section 4.09 hereof and any amendments, restatements, modifica-tions, renewals, supplements, refundings, replacements or refinancings of those agreements; pro-vided that the restrictions therein are not materially more restrictive, taken as a whole, than those contained in this Indenture, the Notes and the Note Guarantees or customarily contained in an ABL credit facility or senior secured credit facility;
(4) applicable law, rule, regulation or order;
(5) any instrument governing Indebtedness or Equity Interests of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred or such Equity Interests were issued in con-nection with or in contemplation of such acquisition), which encumbrance or restriction is not ap-plicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such In-debtedness was permitted by the terms of this Indenture to be incurred;
(6) customary non-assignment provisions in leases, contracts and licenses entered in-to in the ordinary course of business;
(7) purchase money obligations for property acquired in the ordinary course of busi-ness and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of Section 4.08(a) hereof;
(8) any agreement for the sale or other disposition of a Restricted Subsidiary that re-stricts distributions by that Restricted Subsidiary pending its sale or other disposition;
(9) Permitted Refinancing Indebtedness and Permitted Redeemable Stock; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebted-ness and Permitted Redeemable Stock are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(10) Liens permitted to be incurred under the provisions of Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens;
(11) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection with a Restricted In-vestment), which limitation is applicable only to the assets that are the subject of such agree-ments;
(12) restrictions on cash or other deposits or net worth under contracts entered into in the ordinary course of business, including such restrictions imposed by customers or insurance, surety or bonding companies;
(13) restrictions on the ability of any Guarantor to make dividends or other distribu-tions resulting from the operation of payment defaults and reasonable financial covenants con-
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tained in documentation governing Indebtedness of such Guarantor permitted to be incurred un-der this Indenture; and
(14) encumbrance or restriction under any agreement that amends, restates, modifies, refunds, restructures, supplements, extends, renews, refinances, replaces or is of substantially the same type as the agreements containing the encumbrances or restrictions in the foregoing claus-es (1) through (13), or in this clause (14), provided that the terms and conditions of any such en-cumbrances or restrictions, taken as a whole, are, in the good faith judgment of the Company, not materially more restrictive than those under or pursuant to the agreement evidencing the Indebt-edness so extended, restated, modified, refunded, restructured, supplemented, renewed, re-financed or replaced or of substantially the same type.
Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Ac-quired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Re-stricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Dis-qualified Stock or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness, Disqualified Stock or preferred stock (collectively, “Permitted Debt”):
(1) the incurrence by the Company and any Guarantor of additional Indebtedness in an aggregate principal amount at any one time outstanding under this clause (1), which may be reborrowed, not to exceed at the time of and after giving effect to such incurrence, the sum of (x) with respect to an ABL Revolving Credit Facility, the greater of (i) US$50.0 million or (ii) the sum of 85% of the net book value of the Company’s and its Restricted Subsidiaries’ accounts re-ceivable and 70% of the net book value of the Company’s and its Restricted Subsidiaries’ inven-tory, plus (y) US$100.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing In-debtedness;
(3) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebted-ness represented by Capital Lease Obligations, mortgage financings or purchase money obliga-tions, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal
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amount, including all Permitted Refinancing Indebtedness incurred and Permitted Redeemable Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of US$20.0 million and 5.0% of Consolidat-ed Total Assets at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, re-fund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebt-edness) that was permitted by this Indenture to be incurred under the under Section 4.09(a) hereof or clauses (2), (3) or (11) of this Section 4.09(b) or this clause (5);
(6) the issuance by the Company of Permitted Redeemable Stock, the net proceeds of which are used to refund, refinance or replace (a) Indebtedness that was permitted to be in-curred under Section 4.09(a) hereof or clauses (2), (3), (5) or (11) of this Section 4.09(b), (b) Disqualified Stock that was permitted to be issued under Section 4.09(a) hereof or (c) Permitted Redeemable Stock that was permitted to be issued under this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of intercom-pany Indebtedness between or among the Company and any of its Restricted Subsidiaries; pro-vided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company,
will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7);
(8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company,
will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (8);
(9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes;
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(10) the Guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebted-ness was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guaran-tee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebted-ness issuable upon the conversion or exchange of shares of Disqualified Stock, pursuant to the terms of such Disqualified Stock issued in accordance with Section 4.09(a) hereof;
(12) the incurrence by the Company or any of the Guarantors of Indebtedness in re-spect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, perfor-mance and surety bonds in the ordinary course of business;
(13) the incurrence by the Company or any of the Guarantors (i) of Indebtedness aris-ing from the honoring by a bank or other financial institution of a check, draft or similar instru-ment inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days or (ii) Bank Product Debt in the ordinary course of business, exclusive of the obligations described in clause (9) above;
(14) the incurrence by the Company or any of the Guarantors of additional Indebted-ness or Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred and Permitted Redeemable Stock issued to renew, refund, refinance, replace, defease or discharge any Indebted-ness or Disqualified Stock incurred pursuant to this clause (14), not to exceed the greater of US$20.0 million and 5.0% of Consolidated Total Assets at any time outstanding;
(15) the incurrence by Restricted Subsidiaries that are not Guarantors of additional Indebtedness for purposes of financing working capital in an aggregate principal amount at any one time outstanding not to exceed US$20.0 million;
(16) the incurrence by the Company of Indebtedness arising in connection with en-dorsement of instruments for deposit in the ordinary course of business ;
(17) the incurrence by the Company of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, contribution, earnout, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Equity Interests of a Restricted Subsidi-ary otherwise permitted under this Indenture; provided that the maximum liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(18) the incurrence by the Company or any of its Restricted Subsidiaries of Indebted-ness in an aggregate outstanding principal amount that, when taken together with any Permitted Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness incurred pursuant to this clause (18) and then outstanding, will not exceed 100% of the Net Pro-ceeds received by the Company from the issuance or sale (other than to a Restricted Subsidiary) of Equity Interests of the Company (other than through the issuance of Disqualified Stock or pur-suant to the Rights Offering and Standby Purchase); provided, however, that (i) any such Net Proceeds that are so received or contributed shall be excluded for purposes of making Restricted
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Payments under Section 4.07(a) and clauses (2), (5) and (11) of Section 4.07(b) to the extent the Company and its Restricted Subsidiaries incur Indebtedness in reliance thereon and (ii) any Net Proceeds that are so received or contributed shall be excluded for purposes of incurring Indebted-ness pursuant to this clause (18) to the extent the Company or any of its Restricted Subsidiaries makes a Restricted Payment under Section 4.07(a) and clauses (2), (5) and (11) of Section 4.07(b) in reliance thereon;
(19) the incurrence of Indebtedness by the Company or any of its Restricted Subsidi-aries, to the extent that the net proceeds thereof are substantially concurrently deposited with the Trustee to redeem the Notes in full or to defease or to satisfy and discharge the Notes; and
(20) the incurrence by the Company or a Restricted Subsidiary of Indebtedness, Dis-qualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, excluding any such Indebtedness, Disqualified Stock or Preferred Stock in-curred in contemplation of such acquisition; provided that on a pro forma basis for the most re-cently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued, (A) the Company would be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test or (B) the Fixed Charge Coverage Ratio of the Company is no less than the Fixed Charge Coverage Ratio of the Company immediately prior to such acquisition or merger.
The Company will not incur, and will not permit any Guarantor to incur, any Indebted-ness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebt-edness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provid-ed, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on junior priority basis.
For purposes of determining compliance with this Section 4.09, the outstanding principal amount of any particular Indebtedness shall be counted only once and any obligation arising under any Guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded. In the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (20) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Sec-tion 4.09. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting prin-ciples, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.09; provided that, in each such case, the amount of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. For purposes of determining compliance with any U.S. dol-lar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be used, calculated based on the relevant curren-cy exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provi-sion of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Sub-
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sidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date will be:
(i) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(ii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(iii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the amount of the Indebtedness of the other Person.
Section 4.10 Asset Sales.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Sale of Notes Collateral unless:
(1) the Company or such Restricted Subsidiary, as the case may be, receives consid-eration at least equal to the Fair Market Value (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Sale) of the Collateral subject to such Asset Sale;
(2) at least 75% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and
(3) the remaining consideration from such Asset Sale that is not in the form of cash or Cash Equivalents is thereupon with its acquisition pledged as the Notes Collateral to secure the Notes.
For purposes of clause (ii) of the preceding paragraph, the following shall be deemed to be cash: (1) the repayment or assumption of Indebtedness secured by Liens with a priority to the Liens in favor of the Notes and the Guarantees, (2) any securities, notes or other obligations received by the Com-pany or any such Restricted Subsidiary from such transferee that are, within 180 days of the disposition of Collateral, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion, (3) any stock or assets useful in a Per-mitted Business that upon acquisition will constitute Notes Collateral and (4) any Designated Non-Cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an ag-gregate Fair Market Value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (4) and Section 4.10(b)(2)(e) that is at that time outstanding, not to exceed the greater of $25 million and 5.0% of Consolidated Total Assets, 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.
All of the Net Proceeds from Asset Sales and Recovery Events in respect of Notes Col-lateral shall be deposited directly into the Collateral Account; provided that the Company and the Re-stricted Subsidiaries will not be required to cause any Net Proceeds to be held in the Collateral Account except to the extent the aggregate amount of Net Proceeds from all Asset Sales and Recovery Events of Notes Collateral which are not held in the Collateral Account, or have not been previously applied in ac-cordance with the provisions of the following paragraphs, exceeds US$5.0 million in the aggregate.
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Any Net Proceeds deposited in the Collateral Account from any Asset Sale or Recovery Event in respect of Notes Collateral may be withdrawn (1) to be invested by the Company or a Guarantor in additional assets constituting Notes Collateral (including, without limitation, through capital expendi-tures or acquisitions of assets constituting Notes Collateral other than Capital Stock of Foreign Subsidiar-ies, or in the case of Net Proceeds from any Recovery Event, the performance of a restoration of the af-fected Collateral) within 365 days of the date of such Asset Sale or Recovery Event, which additional as-sets are thereupon with their acquisition added to the Notes Collateral securing the Notes; (2) to repay Secured Indebtedness secured by a Permitted Lien on the assets (provided that such Permitted Lien is not pari passu with or subordinate to the Lien on such assets in favor of the holders of the Notes) subject to such Asset Sale or Indebtedness of the applicable Restricted Subsidiary of the Company (if such Restrict-ed Subsidiary is not a Guarantor) and if such Indebtedness is revolving credit Indebtedness, to corre-spondingly reduce commitments with respect thereto (provided that, during an ABL Trigger Period, if such Net Proceeds are from an Asset Sale of ABL Collateral used to repay ABL Obligations no commit-ment reduction is required under the ABL Revolving Credit Facility; provided, further, that, during a First Lien Trigger Period, if such Net Proceeds are from an Asset Sale of Collateral used to repay First Lien Obligations no commitment reduction is required under the First Lien Credit Facility); (3) repurchase, redeem or repay (and correspondingly reduce commitments with respect to) Pari Passu Lien Indebted-ness; provided, that the Company will equally and ratably reduce Indebtedness under the Notes by mak-ing an offer to all holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, the pro rata principal amount of the Notes, such offer to be con-ducted in accordance with the procedures set forth below for a Collateral Disposition Offer but without any further limitation in amount, provided that the Company and its Restricted Subsidiaries will be deemed to have complied with Section 4.10(a)(1) if and to the extent that, within 365 days after the Asset Sale or Recovery Event that generated the Net Proceeds, the Company has entered into and not aban-doned or rejected a binding agreement to consummate any such investment described in Sec-tion 4.10(a)(1) (with such Net Proceeds expressly earmarked for such investment), and such investment is thereafter completed within 180 days after the end of such 365-day period.
Any Net Proceeds from Asset Sales of Notes Collateral or Recovery Events relating to Notes Collateral that are not applied or invested as provided in this subsection (a) or in accordance with the Collateral Documents will be deemed to constitute “Excess Collateral Proceeds.” On or before the 366th (or 421st day, if applicable) day after an Asset Sale or Recovery Event pursuant to this subsec-tion (a), if the aggregate amount of Excess Collateral Proceeds exceeds US$10.0 million, the Company will be required to make an offer (“Collateral Disposition Offer”) to all holders of Notes and all holders of other Pari Passu Lien Indebtedness containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of Notes Collateral to purchase the maximum principal amount of the Notes and such Pari Passu Lien Indebtedness (on a pro rata basis) to which the Collateral Disposition Offer applies that may be purchased out of the Excess Collateral Pro-ceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes, plus ac-crued and unpaid interest to the date of purchase, in accordance with the procedures set forth in this In-denture in integral multiples of US$1,000; provided that no Notes of US$2,000 or less can be repurchased in part. To the extent that the aggregate amount of Notes and other Pari Passu Lien Indebtedness so valid-ly tendered and not properly withdrawn pursuant to a Collateral Disposition Offer is less than the Excess Collateral Proceeds, the Company may use any remaining Excess Collateral Proceeds for general corpo-rate purposes, subject to the other covenants contained in this Indenture. If the aggregate principal amount of Notes surrendered by holders and Pari Passu Lien Indebtedness tendered into such Collateral Disposition Offer exceeds the amount of Excess Collateral Proceeds, the Notes and Pari Passu Lien In-debtedness to be purchased shall be selected on a pro rata basis. Upon completion of such Collateral Dis-position Offer, the amount of Excess Collateral Proceeds shall be reset at zero.
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(b) The Company will not, and will not permit any Restricted Subsidiary to, make any Asset Sale (other than Asset Sales of Notes Collateral which shall be treated in the manner set forth in Section 4.10(a)) unless:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives consid-eration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and
(2) at least 75% of the consideration received in the Asset Sale by the Company or such Restricted Subsidiary is in the form of cash. For purposes of this provision, each of the fol-lowing will be deemed to be cash:
(a) Cash Equivalents;
(b) any liabilities, as shown on the Company’s most recent consolidated bal-ance sheet, of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability;
(c) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are, within 180 days of the Asset Sale, converted by the Company or such Restricted Subsidiary into cash or Cash Equiva-lents, to the extent of the cash or Cash Equivalents (of the variety described in clauses (1) through (6) of the definition thereof) received in that conversion;
(d) any stock or assets of the kind referred to in clauses (3) or (5) of the next paragraph of this Section 4.10; and
(e) any Designated Non-Cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (e) and Section 4.10(a)(4) that is at that time outstanding, not to exceed the greater of $25 million and 5.0% of Consolidated Total Assets, 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.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale, subject to sub-section (b) of this Section 4.10, the Company (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds at its option:
(1) to repay Secured Indebtedness secured by a Permitted Lien on the assets (provid-ed that such Permitted Lien is not pari passu with or subordinate to the Lien on such assets in fa-vor of the holders of the Notes) subject to such Asset Sale or Indebtedness of the applicable Re-stricted Subsidiary of the Company (if such Restricted Subsidiary is not a Guarantor) and if such Indebtedness is revolving credit Indebtedness, to correspondingly reduce commitments with re-spect thereto (provided that, during an ABL Trigger Period, if such Net Proceeds are from an As-set Sale of ABL Collateral used to repay ABL Obligations no commitment reduction is required under the ABL Revolving Credit Facility; provided, further, that, during a First Lien Trigger Pe-riod, if such Net Proceeds are from an Asset Sale of Collateral used to repay First Lien Obliga-tions no commitment reduction is required under the First Lien Credit Facility);
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(2) to repay (and correspondingly reduce commitments with respect to) Pari Passu Indebtedness; provided, that the Company will equally and ratably reduce Indebtedness under the Notes by making (A) open market purchases (if such Net Proceeds are from Asset Sales (other than Asset Sales of Collateral)) or redemptions of the Notes or (B) an offer to all holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, the pro rata principal amount of the Notes, such offer to be conducted in accord-ance with the procedures set forth below for an Asset Sale Offer but without further limitation in amount;
(3) to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company;
(4) to repay Indebtedness of a Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed to the Company or another Restricted Subsidiary, to the extent that the Net Proceeds applied for such repayment relate to an Asset Sale of assets (other than Asset Sale of Collateral) of a Restricted Subsidiary that is not a Guarantor;
(5) to make a capital expenditure;
(6) to purchase inventory, to the extent the Net Proceeds applied for such purchase relate to the Asset Sale of ABL Collateral; or
(7) to acquire other assets that are not classified as current assets under IFRS and that are used or useful in a Permitted Business.
Pending the final application of any Net Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as provided above will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds US$15.0 million, within 15 days thereof, the Company will make an Asset Sale Offer to all holders of Notes and all holders of other Indebtedness that is pari passu with the Notes (“Pari Passu Indebtedness”) containing provisions similar to those set forth in this Indenture with respect to offers to purchase or re-deem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other Pari Passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and other Pari Passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Company will select the Notes to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Pro-ceeds will be reset at zero.
(c) The Collateral Disposition Offer or Asset Sale Offer will remain open for a peri-od of 20 business days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Sale Offer Period”). No later than five business days after the termination of the Asset Sale Offer Period (the “Asset Sale Purchase Date”), the Company will purchase the principal amount of Notes (and other Indebtedness required to be purchased pursuant to the last paragraph of sub-section (a) of this Section 4.10) and Pari Passu Indebtedness required to be purchased pursuant to this
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Section 4.10 (the “Asset Sale Offer Amount”) or, if less than the Asset Sale Offer Amount has been so validly tendered, all Notes (and other Indebtedness required to be purchased pursuant to the last paragraph of subsection (a) of this Section 4.10) and Pari Passu Indebtedness, if applicable, validly tendered in re-sponse to the Collateral Disposition Offer or Asset Sale Offer, as applicable. If the Asset Sale Purchase 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 such Asset Sale Purchase Date to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to hold-ers who tender Notes pursuant to the Collateral Disposition Offer or Asset Sale Offer.
On or before the Asset Sale Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Sale Offer Amount of Notes (and other Indebtedness required to be purchased pursuant to the last paragraph of subsection (a) of this Section 4.10) and Pari Passu Indebtedness or portions of Notes (and other Indebtedness required to be purchased pursuant to the last paragraph of subsection (a) of this Section 4.10) and Pari Passu Indebtedness so valid-ly tendered and not properly withdrawn pursuant to the Collateral Disposition Offer or Asset Sale Offer, or if less than the Asset Sale Offer Amount has been validly tendered and not properly withdrawn, all Notes (and other Indebtedness required to be purchased pursuant to the last paragraph of subsection (a) of this Section 4.10) and Pari Passu Indebtedness so validly tendered and not properly withdrawn, in each case in integral multiples of US$1,000; provided that no Notes of US$2,000 or less can be repurchased in part. The Company or the Paying Agent, as the case may be, will promptly (but in any case not later than five business days after termination of the Asset Sale Offer Period) mail or deliver to each tendering holder of Notes or holder or lender of such other Indebtedness or Pari Passu Indebtedness, as the case may be, an amount equal to the purchase price of the Notes, such other Indebtedness or Pari Passu Indebt-edness so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trus-tee, upon delivery of an Officers’ Certificate from the Company, will authenticate and mail or deliver such new Note to such holder, in a principal amount equal to any unpurchased portion of the Note surren-dered; provided that each such new Note will be in a principal amount of US$2,000 or an integral multi-ple of US$1,000 in excess thereof. Any Note not so accepted will be promptly mailed or delivered by the Company to the holders thereof. The Company will publicly announce the results of the Collateral Dispo-sition Offer or Asset Sale Offer, as the case may be, on the Asset Sale Purchase Date.
(d) The Company will comply with the requirements of Rule 14e-1 under the Ex-change Act and any other securities laws and regulations, including, without limitation, Canadian Securi-ties Legislation to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to a Collateral Disposition Offer or an Asset Sale Offer. To the extent that the provi-sions of any securities laws or regulations, including, without limitation, Canadian Securities Legislation conflict with the provisions of Section 3.10 hereof or this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations un-der Section 3.10 hereof or this Section 4.10 by virtue of such compliance.
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agree-ment, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of US$7.5 million, unless:
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(1) the Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$10.0 million, a resolu-tion of the Board of Directors of the Company set forth in an Officers’ Certificate certi-fying that such Affiliate Transaction complies with this Section 4.11 and that such Affil-iate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company; and
(B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$20.0 million, an opin-ion as to the fairness to the Company or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or invest-ment banking firm of national standing.
(b) The following items will not be deemed to be Affiliate Transactions and, there-fore, will not be subject to the provisions of Section 4.11(a) hereof:
(1) consummation of the Rights Offering and Standby Purchase;
(2) any employment agreement, employee compensation or benefit plan, officer or director indemnification agreement or any similar arrangement (and any payments pursuant there-to) entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(3) transactions between or among the Company or its Restricted Subsidiaries;
(4) transactions with a Person (other than an Unrestricted Subsidiary of the Compa-ny) that is an Affiliate of the Company solely because the Company owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(5) payment of reasonable and customary fees and reimbursements of expenses (pur-suant to indemnity arrangements, relocation programs or otherwise) of officers, directors, em-ployees or consultants of the Company or any of its Restricted Subsidiaries;
(6) the grant of equity incentives or similar rights to employees and directors of the Company pursuant to plans approved by the Company’s Board of Directors or a committee there-of comprised solely of independent directors;
(7) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Company’s Board of Directors or a committee thereof com-prised solely of independent directors;
(8) any issuance of Equity Interests (other than Disqualified Stock) of the Company to Affiliates of the Company;
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(9) Restricted Payments that do not violate the provisions of Section 4.07 hereof and transactions permitted by, and complying with, the provisions of Section 5.01 hereof;
(10) Permitted Investments;
(11) loans or advances to employees in the ordinary course of business not to exceed US$2.5 million in the aggregate at any one time outstanding;
(12) any transaction on arm’s-length terms with any non-Affiliate that becomes an Af-filiate as a result of such transactions;
(13) any agreement, instrument or arrangement as in effect on the Issue Date and any transactions contemplated thereby and amendment or modification thereto or replacement there-of, so long as such amendment, modification or replacement is not materially less favorable, tak-en as a whole, to the Holders of the Notes than the original agreement, instrument or arrangement as in effect on the Issue Date;
(14) any contribution of capital to the Company ;
(15) any tax sharing agreement or arrangement and payments pursuant thereto among the Company and its Subsidiaries and any other Person with which the Company or its Subsidiar-ies files a consolidated, combined or unitary tax return or with which the Company or any of its Restricted Subsidiaries is part of a consolidated, combined or unitary group for tax purposes in amounts not otherwise prohibited by this Indenture;
(16) transactions with a joint venture engaged in a Permitted Business; provided that all the outstanding ownership interests of such joint venture are owned only by the Company, its Restricted Subsidiaries and Persons who are not Affiliates of the Company;
(17) transactions with customers, clients, suppliers, purchasers, industry participants or sellers of goods or insurance providers, in each case in the ordinary course of business or in connection with a Permitted Business;
(18) any consulting, employment agreement or arrangement, employee or director compensation, stock option, bonus, benefit or other similar plan, officer or director indemnifica-tion, severance or expense reimbursement arrangement, or any similar arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and pay-ments and other benefits (including, bonuses, retirement, severances, health, stock option, re-stricted share, stock appreciation right, phantom right, profits interest, equity incentive and other benefit plans) pursuant thereto;
(19) the payment of reasonable compensation or fees to, or executing customary ex-pense reimbursement, indemnification, or similar arrangements with, directors, executive officers or employees of the Company or any Restricted Subsidiary, made in the ordinary course of busi-ness;
(20) the reimbursement of reasonable out-of-pocket costs incurred by an Affiliate of the Company on behalf of or for the account of the Company or any Guarantor;
(21) the issuance of any Equity Interests (other than Disqualified Stock) of the Com-pany to its Affiliates (or contributions in respect of such Equity Interests by Affiliates);
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(22) any transaction with an Affiliate where the only consideration paid by the Com-pany or any Restricted Subsidiary is Equity Interests;
(23) repurchase of Notes or other indebtedness held by an Affiliate of the Company if repurchased on the same terms as offered to Persons that are not Affiliates of the Company; and
(24) any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged into the Company or a Restricted Subsidiary of the Company; provided, that such agreement was not entered into contemplation of such acquisition or merger, or any amendment thereto (so long as any such amendment is not disadvantageous to the holders of the Notes when taken as a whole as compared to the applicable agreement as in ef-fect on the date of such acquisition or merger).
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness or At-tributable Debt on any asset now owned or hereafter acquired, except Permitted Liens.
Section 4.13 Business Activities.
The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Com-pany and its Restricted Subsidiaries taken as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiar-ies, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to Holders.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to US$2,000 or an integral multiple of US$1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest, if any, on the Notes repurchased to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control Payment”). Within ten days following the date of any Change of Control, the Company will mail a notice to each Holder and the
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Trustee describing the transaction or transactions that constitute or will constitute such Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the later of (a) the date such notice is mailed and (b) the date of such Change of Control (the “Change of Control Payment Date”);
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of Control Pay-ment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to ac-crue interest after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a Change of Con-trol Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent 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 election if the Paying Agent re-ceives, not later than the close of business on the second business day preceding the Change of Control Payment Date, written notice setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which un-purchased portion must be equal to US$2,000 or an integral multiple of US$1,000 in excess thereof in principal amount.
The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other applicable securities laws and regulations, including, without limitation, Canadian Securi-ties Legislation, to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations, including, without limitation, Canadian Securities Legislation, conflict with the provisions of Section 3.10 hereof or this Section 4.15, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.10 hereof or this Sec-tion 4.15 by virtue of such compliance.
(b) On the Change of Control Payment Date, the Company will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent on or prior to 11:00 a.m. Eastern Time, an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly ten-dered; and
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(3) deliver or cause to be delivered to the Trustee the Notes properly accepted to-gether with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.
The Paying Agent will promptly mail (but in any case not later than five days after the Change of Control Payment Date) to each Holder of Notes properly tendered the Change of Control Pay-ment for such Notes, and the Trustee will, upon written direction from the Company, promptly authenti-cate and mail (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. The Company will publicly an-nounce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer upon a Change of Control if (1) in connection with or in contemplation of any Change of Control, it has made an offer to purchase (an “Alternate Offer”) any and all Notes validly tendered at a cash price equal to or higher than the Change of Control Payment and has purchased all Notes properly tendered in accordance with the terms of such Alternate Offer, (2) 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 Section 4.15 and Section 3.10 hereof and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (3) notice of redemption has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary in this Section 4.15, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.
Section 4.16 [Reserved].
Section 4.17 Payments for Consent.
The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder for or as an in-ducement 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 be paid and is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Section 4.18 Additional Note Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or creates another Wholly Owned Restricted Subsidiary on or after the date of this Indenture, within 30 business days of the date of such acquisition or guarantee, as applicable, such Subsidiary (other than an Excluded Subsidiary) must become a Guarantor and execute a supplemental indenture and deliver an Officers’ Certificate and Opin-ion of Counsel to the Trustee as to the satisfaction of all conditions precedent.
The Company will not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee any other Indebtedness of the Company or any Guarantor (including, but not limited to, any Indebtedness under any Credit Facility but excluding Indebtedness incurred pursuant to clause (15) of the definition of Permitted Debt) unless such Restricted Subsidiary is a Guarantor or substantially simultane-ously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary, which Guarantee shall be (i) senior in right of payment to such Re-
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stricted Subsidiary’s Guarantee of such other Indebtedness if such other Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantee of the Notes and (ii) pari passu in right of payment with such Restricted Subsidiary’s Guarantee of such other Indebtedness if otherwise.
Each Restricted Subsidiary that becomes a Guarantor on or after the date of this Indenture shall also become a party to the Collateral Documents and the Intercreditor Agreements (if any) and shall as promptly as practicable execute and deliver such security instruments, financing statements, mortgag-es, deeds of trust and certificates and opinions of counsel as may be necessary to vest in the Notes Collat-eral Agent a perfected first, second or third priority security interest, as the case may be, (subject to Per-mitted Liens) upon all its properties and assets (other than Excluded Assets) as security for the Notes or the Note Guarantees and as may be necessary to have such property or asset added to the Collateral as required under the Collateral Documents and this Indenture, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such properties and assets to the same extent and with the same force and effect; provided, however, that if granting such first, second or third priority secu-rity interest, as the case may be, in any such property or asset requires the consent of a third party, the Company will use commercially reasonable efforts to obtain such consent for the benefit of the Notes Collateral Agent on behalf of the holders.
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is desig-nated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary 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 4.07 hereof or under one or more clauses of the definition of Permitted Investments, as determined by the Company. That designation will only be per-mitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of the Company may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a Default.
Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Direc-tors giving effect to such designation and an Officers’ Certificate certifying that such designation com-plied with the preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unre-stricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter no longer constitute an Unrestricted Subsidiary for purposes of this Indenture and any Indebt-edness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, the Company will be in default of such covenant. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 4.09 hereof, 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.
Section 4.20 Changes in Covenants When Notes Rated Investment Grade.
(a) If on any date following the date of this Indenture:
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(1) the Notes are rated Baa3 or better by Moody’s and BBB- or better by S&P (or, if either such entity ceases to rate the Notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency); and
(2) no Default or Event of Default shall have occurred and be continuing,
then, beginning on that day and subject to the provisions of Section 4.20(b) hereof, Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.18 and 4.19 hereof and clause (4) of Section 5.01 hereof will no longer apply.
During any period that the foregoing provisions of this Indenture have been suspended, the Company’s Board of Directors may not designate any of the Company’s Subsidiaries as Unrestricted Subsidiaries pursuant to Section 4.19 hereof. The Company shall provide written notice to the Trustee at any time the foregoing provisions of his Indenture have been suspended as provided above.
(b) If the rating assigned by either such rating agency should subsequently decline to below Baa3 or BBB-, respectively, the foregoing covenants will be reinstituted as of and from the date of such rating decline (written notice of which will be provided by the Company to the Trustee). Calcula-tions under the reinstated Section 4.10 will be made as if Section 4.10 had been in effect since the date of this Indenture except that no default will be deemed to have occurred solely by reason of a Restricted Payment made while the covenant set forth in Section 4.10 was suspended. Additionally, calculation of the amount of Excess Proceeds from Net Proceeds under the reinstated Section 4.10 shall be reset at zero. All Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, during the suspension of the covenants will be classified to have been incurred or issued pursuant to Section 4.09(b)(2).
ARTICLE 5 SUCCESSORS
Section 5.01 Amalgamation, Merger, Consolidation, or Sale of Assets.
(a) The Company will not, directly or indirectly: (i) consolidate, amalgamate or merge with or into another Person; or (2) sell, assign, transfer, convey or otherwise dispose of all or sub-stantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person (other than a Guarantor), unless:
(1) either:
(A) the Company is the surviving corporation; or
(B) the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company) or to which such sale, assignment, transfer, con-veyance or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia, or under the federal laws of Canada or any province or territory thereof; and, if such entity is not a corporation, a co-obligor of the Notes is a corporation organized or existing un-der any such laws;
(2) the Person formed by or surviving any such consolidation, amalgamation or mer-ger (if other than the Company) or the Person to which such sale, assignment, transfer, convey-ance or other disposition has been made (the “Successor Company”) assumes all the obligations
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of the Company under the Notes, this Indenture, the Collateral Documents (as applicable) and the Intercreditor Agreements (if any) pursuant to a supplemental indenture and any other agreements in form and substance necessary and appropriate to evidence such assumption and shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collat-eral owned by or transferred to the Successor Company, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code, PPSA or other similar statute or regulation of the relevant states or jurisdictions;
(3) immediately after such transaction, no Default or Event of Default exists;
(4) the Company or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been made, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the be-ginning of the applicable four-quarter period, either (a) would be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (b) the Fixed Charge Coverage Ratio of the Company is no less than the Fixed Charge Coverage Ratio of the Company immediately prior to such transaction;
(5) each Guarantor (unless the Company is the surviving corporation, or unless such Guarantor is the other party to the transactions above, in which case subclause (b) of the second succeeding paragraph shall apply) shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person’s Obligations in respect of this Indenture and the Notes and its obligations under the Collateral Documents and the Intercreditor Agreements (if any) shall continue to be in effect and shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to pre-serve and protect the Lien on the Collateral owned by such Guarantor, together with such financ-ing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar docu-ment under the Uniform Commercial Code, PPSA or other similar statute or regulation of the rel-evant states or jurisdictions;
(6) the Collateral transferred to the Successor Company will (a) continue to consti-tute Collateral under this Indenture and the Collateral Documents, (b) be subject to the Lien in fa-vor of the Notes Collateral Agent for the benefit of the holders of the Notes, and (c) not be subject to any Lien, other than Liens permitted by the terms of this Indenture; and
(7) to the extent that the assets of the Person which is merged, amalgamated or con-solidated with or into the Successor Company are assets of the type which would constitute Col-lateral under the Collateral Documents, the Successor Company will take such other actions as may be reasonably necessary to cause such property and assets to be made subject to the Lien in favor of the Trustee under the Collateral Documents and take all steps to perfect the security in-terest in such collateral in the manner and to the extent required in this Indenture.
In addition, the Company will not, directly or indirectly, lease all or substantially all of the properties and assets of it and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.
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This Section 5.01(a) will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Company and its Restricted Subsidiaries.
Clauses (3) and (4) of the first paragraph of this Section 5.01(a) will not apply to (a) any merger, amalgamation or consolidation of the Company with or into one of its Restricted Subsidiaries for any purpose or (b) any merger, amalgamation or consolidation of the Company with or into an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction.
(b) The Company will not permit any Guarantor to consolidate with, amalgamate with or merge with or into or wind up into (whether or not the Guarantor is the surviving corporation), or sell, assign, convey, transfer, lease, convey or otherwise dispose of all or substantially all of its properties and assets, in one or more related transactions, to any Person (other than to the Company or another Guarantor) unless:
(1) if such entity remains a Guarantor, (a) the resulting, surviving or transferee Per-son (the “Successor Guarantor”) will be a corporation, partnership, limited partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States, the District of Columbia, the federal laws of Canada or any prov-ince or territory thereof; (b) the Successor Guarantor, if other than such Guarantor, expressly as-sumes in writing by supplemental indenture (and other applicable documents), executed and de-livered to the Trustee, in form and substance necessary and appropriate to evidence such assump-tion, all the obligations of such Guarantor under the Note Guarantee, this Indenture, the Collateral Documents (as applicable) and the Intercreditor Agreements (if any) and shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such juris-dictions as may be required by applicable law to preserve and protect the Lien on the Collateral owned by or transferred to the Successor Guarantor, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code, PPSA or other similar statute or regulation of the relevant states or jurisdictions; (c) immediately after giving effect to such transaction (and treating any Indebted-ness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default of Event of Default shall have occurred and be continuing; and (d) the Company will have delivered to the Trustee an Officers’ Certifi-cate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture and the Collateral Documents; and
(2) the transaction is made in compliance with the covenant described in Sec-tion 4.10 to the extent applicable.
Notwithstanding the foregoing, any Guarantor may merge or amalgamate, with or into or transfer all or part of its properties and assets to another Guarantor or the Company or merge with a Re-stricted Subsidiary of the Company solely for the purpose of reincorporating the Guarantor in a State of the United States or the District of Columbia or Canada or any province or territory thereof, as long as the amount of Indebtedness of such Guarantor and its Restricted Subsidiaries is not increased thereby.
For purposes of this Section 5.01, 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 Company, which properties and assets, if held by the Company instead of such Subsidiaries, would con-
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stitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the suc-cessor Person formed by such amalgamation or consolidation into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, amalgamation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture refer-ring to the “Company” shall refer instead to the successor Person and not to the Company), and may ex-ercise every right and power of the Company under this Indenture with the same effect as if such succes-sor Person had been named as the Company herein and upon such substitution the predecessor Company shall be relieved from all obligations under this Indenture.
Upon any consolidation, amalgamation, merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of a Guarantor in a transaction that is subject to, and that complies with the provision of, Section 5.01 hereof, the successor Person formed by such amalgamation or consolidation into or with which such Guarantor is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, amalgamation, merger, sale, as-signment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Guarantor” shall refer instead to the successor Person and not to such Guarantor), and may exercise eve-ry right and power of such Guarantor under this Indenture with the same effect as if such successor Per-son had been named as a Guarantor herein. It is understood that following such consolidation, amalgama-tion, merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantial-ly all of the properties or assets of a Guarantor in a transaction that is subject to, and that complies with the provision of, Section 5.01 hereof, the predecessor Guarantor shall be relieved from all obligations un-der this Indenture other than those that by their terms survive.
ARTICLE 6 DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an “Event of Default”:
(1) default for 30 days in the payment when due of interest on the Notes;
(2) default in the payment when due (at maturity, upon acceleration, redemption or otherwise) of the principal of, or premium, if any, on, the Notes;
(3) failure by the Company or any of its Restricted Subsidiaries to comply with the provisions of Sections 4.10, 4.15 or 5.01 hereof, which failure cannot be remedied or, if such fail-ure can be remedied, is not remedied within 30 days after the date on which notice thereof requir-ing the Company to remedy the same has been given to the Company by the Trustee or the Hold-ers of at least 25% in aggregate outstanding principal amount of the Notes then outstanding vot-ing as a single class (with a copy to the Trustee; provided that failure to provide such a copy shall not vitiate the effectiveness of any such notice to the Company);
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(4) failure by the Company or any of its Restricted Subsidiaries to comply with the provisions of Section 4.03 hereof for 120 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class (with a copy to the Trustee; provided that failure to provide such a copy shall not viti-ate the effectiveness of any such notice to the Company);
(5) failure by the Company or any of its Restricted Subsidiaries for 60 days after no-tice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class (with a copy to the Trustee; provided that failure to provide such a copy shall not vitiate the effectiveness of any such notice to the Compa-ny) to comply with any of the other agreements in this Indenture;
(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now ex-ists, or is created after the date of this Indenture, if that default:
(A) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness following the expiration of the grace period provided in such In-debtedness on the date of such default (a “Payment Default”); or
(B) results in the acceleration of such Indebtedness prior to its express ma-turity,
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 ma-turity of which has been so accelerated, aggregates US$20.0 million or more;
(7) failure by the Company or any of its Significant Subsidiaries to pay, bond, dis-charge or have stayed final, non-appealable judgments entered by a court or courts of competent jurisdiction aggregating in excess of US$20.0 million, which judgments are not paid, bonded, discharged or stayed for a period of 60 days;
(8) except as permitted by this Indenture, any Note Guarantee of a Significant Sub-sidiary is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor that is a Significant Subsidiary, or any Person act-ing on behalf of any Guarantor that is a Significant Subsidiary, denies or disaffirms its obligations under its Note Guarantee of a Significant Subsidiary;
(9) any of the following events with respect to the Company or any Significant Sub-sidiary:
(A) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law, including any corporate law relating to arrangements, reorganizations or restructuring permitting a debtor to obtain a stay or a compromise of the claims of its creditors
(i) commences a voluntary case;
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(ii) consents to the entry of an order for relief against it in an invol-untary case;
(iii) consents to the appointment of a custodian, receiver, receiver-manager, trustee in bankruptcy monitor or similar officer of it or for any substan-tial part of its property;
(iv) takes any comparable action under any foreign laws relating to insolvency; or
(B) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Significant Subsidiary in an involuntary case;
(ii) appoints a custodian, receiver, receiver-manager, trustee in bank-ruptcy monitor or similar officer of the Company or any Significant Subsidiary or for any substantial part of its property; or
(iii) orders the liquidation of the Company or any Significant Subsid-iary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
provided, that for the purposes of this clause (9), a Significant Subsidiary shall include any group of Subsidiaries that together would constitute a Significant Subsidiary;
(10) with respect to any Collateral having a fair market value in excess of US$20.0 million, individually or in the aggregate, (A) the failure of the security interest with re-spect to such Collateral under the Collateral Documents, at any time, to be in full force and effect for any reason other than in accordance with their terms and the terms of this Indenture and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture if such Default continues for 60 days, (B) the declaration that the security interest with respect to such Collateral created under the Collateral Documents or under this Indenture is invalid or unen-forceable, if such Default continues for 60 days or (C) the assertion by the Company or any Guar-antor, in any pleading in any court of competent jurisdiction, that any such security interest is in-valid or unenforceable; and
(11) the Company shall not have received proceeds of at least $175 million from the Rights Offering and Standby Purchase or from any other issuance or contribution of Equity Inter-est by no later than 105 days after the Issue Date.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (9) of Section 6.01 hereof, with re-spect to the Company, any Restricted Subsidiary of the Company that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Sub-sidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee at the written direction of the Holders
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of at least 25% in aggregate principal amount of the then outstanding Notes, or such Holders, may declare all the Notes to be due and payable immediately by notice in writing to the Company.
Upon any such declaration, the Notes shall become due and payable immediately.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and interest on the Notes or to enforce the perfor-mance of any provision of the Notes, this Indenture, the Intercreditor Agreements (if any) or any Collat-eral Documents.
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. All remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults; Rescission of Acceleration.
Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all Holders waive an existing Default or Event of Default and its consequences hereunder or the Collateral Documents, except a continuing Default or Event of De-fault in the payment of interest or premium, if any, on, or principal of the Notes (including in connection with an offer to purchase) and may rescind an acceleration with respect to the Notes and its consequences. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver and rescission shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Subject to the terms of the Intercreditor Agreements (if any) and Collateral Documents, Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that con-flicts with law or this Indenture, any Collateral Document or the Intercreditor Agreements (if any) or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would in-volve the Trustee in personal liability. The Trustee shall not be liable for any action it takes or omits to take in good faith in accordance with any direction received by it.
Section 6.06 Limitation on Suits.
Subject to the provisions of this Indenture relating to the duties of the Trustee, in case 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 Holders of Notes unless such Holders have offered to the Trustee indemnity or security satisfactory to it 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 De-fault is continuing;
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(2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes have requested in writing the Trustee to pursue the remedy;
(3) such Holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense;
(4) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and
(5) Holders of a majority in aggregate principal amount of the then outstanding Notes have not given the Trustee a written direction inconsistent with such request within such 60-day period.
Section 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), 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.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on, the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, in-demnities, expenses, disbursements and advances of the Trustee, its experts, agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
Subject to the Intercreditor Agreements (if any), the Trustee is authorized to 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, indemnities, expenses, dis-bursements and advances of the Trustee, its experts, agents and counsel) and Holders allowed in any judi-cial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its proper-ty and shall be entitled and empowered to collect, receive and distribute any money or other property pay-able or deliverable on any such claims and any custodian in any such judicial proceeding is hereby au-thorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall con-sent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, indemnities expenses, disbursements and advances of the Trustee, its ex-perts, agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the ex-tent that the payment of any such compensation, indemnities, expenses, disbursements and advances of the Trustee, its experts, agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied 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. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any
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plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
Subject to the Collateral Documents and the Intercreditor Agreements (if any), if the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:
First: to the Trustee, the Notes Collateral Agent, their experts, agents and counsel for amounts due under Section 7.07 hereof, including payment of all compensation, indemnities, ex-penses and liabilities incurred, and all advances made, by the Trustee and the Notes Collateral Agent and the costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for principal, 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, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.
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 as a Trustee, 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 a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.
ARTICLE 7 TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of 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 per-son’s own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
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(2) in the absence of negligence, willful misconduct or bad faith on its part, the Trus-tee may conclusively rely, as to the truth of the statements and the correctness of the opinions ex-pressed therein, upon certificates or opinions furnished to the Trustee and conforming to the re-quirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not con-firm or investigate the accuracy of mathematical calculation or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is conclusively determined in a court of competent jurisdiction in a non-appealable judgment that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with a direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability in the performance of any of its duties hereunder, or in exercise of any of its rights or powers. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. None of the provisions contained in this Indenture shall in any event require the Trustee to perform or be responsible or liable for the manner of performance of any obligations of the Company under this Indenture.
(f) The Trustee will not be liable for interest or investment income on any money re-ceived by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely on and shall incur no liability acting upon any document 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 this document, or in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement, order or other paper docu-ment.
(b) Before the Trustee acts or refrains from acting, it shall be entitled to receive an Officers’ Certificate and an Opinion of Counsel. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Coun-sel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
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(c) The Trustee may execute any of the rights or powers vested in it by this Inden-ture either directly or through its attorneys,agents custodian or nominee and will not be responsible for the supervision, misconduct or negligence of any agent or attorney appointed with due care.
(d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, di-rection or notice from the Company will be sufficient if signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation here-to at the request, order or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to it against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any Default or Event of De-fault unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture. Delivery of reports or other infor-mation to third parties or the Trustee does not constitute actual or constructive knowledge or notice.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(i) The Trustee shall not be required to give any bond or surety in respect of the per-formance of its powers and duties hereunder.
(j) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit or loss of opportunity, whether or not foreseeable, even if the Trustee has been advised of the possibility thereof and regardless of the form in which damages are sought) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(k) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture. Further, the Trustee shall assume, and shall be protected in assuming, that the Company is authorized by its constitutional documents to enter into this Indenture and to take all action permitted to be taken pursuant to its provisions.
(l) When the Trustee incurs expenses or renders services in connection with and Event of Default, as specified in 6.01 hereof, such expenses (including the reasonable fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administra-tion under any bankruptcy law or law relating to creditors’ rights generally.
(m) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, enti-tlement order, approval or other paper document.
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(n) The Notes Collateral Agent shall be afforded herein, in each of the Collateral Documents, all of the rights, powers, immunities and indemnities granted to the Trustee in this Indenture, however, the foregoing shall not be construed to impose the Trustee’s standard of care on to the Notes Collateral Agent.
(o) If the Trustee is acting as Agent hereunder, it shall be afforded the same rights, protections, immunities and indemnities as granted to the Trustee by this Indenture.
Section 7.03 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 Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee’s Disclaimer.
The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Pay-ing Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is actually known to the Trustee, the Trustee will mail to Holders a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium or inter-est on, any Note, the Trustee may withhold the notice if and so long as it in good faith determines that withholding the notice is in the interests of Holders.
Section 7.06 Reports by Trustee to Holders.
(a) Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee will mail to all Holders a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmit-ted). The Trustee also will comply with TIA § 313(b)(2). The Trustee will also transmit by mail all re-ports as required by TIA § 313(c).
(b) A copy of each report at the time of its mailing to Holders will be mailed by the Trustee to the Company and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Company will promptly notify the Trustee when the Notes are listed on any stock exchange or of any delisting thereof.
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Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee or the Notes Collateral Agent, as the case may be, from time to time such compensation as agreed in writing for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. The Trustee’s or the Notes Col-lateral Agent’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee or the Notes Collateral Agent, as the case may be, promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services, except any such disbursements, advances or expenses as may be attributable to its negligence or willful misconduct. Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s or the Notes Collateral Agent’s agents and counsel.
(b) The Company will indemnify the Trustee and the Notes Collateral Agent against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture and related Collateral Documents, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to (i) its negligence or willful misconduct in the case of the Trustee or (ii) its gross negligence or willful misconduct in the case of the Notes Collateral Agent. The Trustee or the Notes Collateral Agent, as applicable, will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee or the Notes Collateral Agent, as ap-plicable, to so notify the Company will not relieve the Company of its obligations hereunder. The Com-pany will defend the claim and the Trustee or the Notes Collateral Agent, as applicable, will cooperate in the defense. The Trustee or the Notes Collateral Agent, as applicable, may have separate counsel and the Company will pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent will not be unreasonably withheld or delayed.
(c) The obligations of the Company under this Section 7.07 will survive the satisfac-tion and discharge of this Indenture or the earlier resignation or removal of the Trustee.
(d) Notwithstanding anything to the contrary in Section 4.08 hereto, to secure the Company’s payment obligations in this Section 7.07, the Trustee or the Notes Collateral Agent, as appli-cable, will have a Lien prior to the Notes on all money or property held or collected by the Trustee or the Notes Collateral Agent, as applicable, except that held in trust to pay principal and interest on particular Notes. Such Lien will survive the satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(7) or (8) hereof occurs, the expenses and the compensation for the services (in-cluding the fees and expenses of its agents and counsel) are intended to constitute expenses of administra-tion under any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent ap-plicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08 and the payment of any and all amounts then due and owing to the Trustee.
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(b) The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writ-ing. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the suc-cessor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstand-ing Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 60 days after the retiring Trus-tee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction at the expense of the Company for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of compe-tent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its appointment to the re-tiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will be-come effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations un-der Section 7.07 hereof will continue for the benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee amalgamates, consolidates, merges or converts into, or transfers all or sub-stantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation or national banking as-sociation 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 supervi-sion or examination by federal or state authorities and that has a combined capital and surplus of at least US$50.0 million as set forth in its most recent published annual report of condition.
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This Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent in-dicated therein.
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees, the Collateral Documents and the Intercreditor Agreements (if any)) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defea-sance”). For this purpose, Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees, the Collateral Documents and the Intercreditor Agreements (if any)), which will there-after be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations un-der such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;
(2) the Company’s obligations with respect to such Notes under Article 2 and Sec-tion 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee and the Compa-ny’s and the Guarantors’ obligations in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
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Section 8.03 Covenant Defeasance.
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.17, 4.18 and 4.19 hereof and clause (4) of Sec-tion 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Sec-tion 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Hold-ers (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply with and will 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 cove-nant or by reason of any reference in any such covenant to any other provision herein or in any other doc-ument and such omission to comply will not constitute a Default or an Event of Default under Sec-tion 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(8) hereof and Sections 6.01(10) and (11) hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under either Sec-tion 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination there-of, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium, if any, on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the Company must deliver to the Trustee an Opinion of Counsel confirming that:
(A) the Company has received from, or there has been published by, the In-ternal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Le-gal Defeasance had not occurred;
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(3) in the case of an election under Section 8.03 hereof, the Company must deliver to the Trustee an Opinion of Counsel confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant De-feasance and will be subject to 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 has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be ap-plied to such deposit (and any similar concurrent deposit relating to other Indebtedness) and the granting of Liens to secure such borrowings);
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or vio-lation of, or constitute a default under, any material agreement or instrument (other than this In-denture and the agreements governing any other Indebtedness being defeased, discharged or re-placed) to which the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is bound;
(6) the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring Holders over the other credi-tors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Cov-enant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government Securities (in-cluding the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for pur-poses of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof 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 Company 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 and interest, but such money need not be segre-gated from other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Sec-tion 8.04 hereof 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 8 to the contrary, the Trustee will deliver or pay to the Company from time to time upon the written request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
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Section 8.06 Repayment to Company.
Subject to any relevant unclaimed property laws, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium or interest on, any Note and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on its written request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Gov-ernment Securities in accordance with Section 8.04 or 8.05 hereof, 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 Company’s and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.04 or 8.05 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.04 or 8.05 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium or interest on, any Note following the reinstate-ment of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to re-ceive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders.
(a) Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes, or the Note Guarantees or the Collat-eral Documents or the Intercreditor Agreements (if any) without notice to or the consent of any Holder:
(1) to cure any ambiguity, omission, mistake, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;
(3) to provide for the assumption of the Company’s or a Guarantor’s obligations to Holders and Note Guarantees by a successor to the Company or such Guarantor pursuant to Arti-cle 5 or Article 10 hereof;
(4) to make any change that would provide any additional rights or benefits to Hold-ers or that does not adversely affect the legal rights hereunder of any such Holder in any material respect as determined in good faith by the Company;
(5) to comply with requirements of the SEC in order to effect or maintain the qualifi-cation of this Indenture under the TIA;
(6) to conform the text of this Indenture, the Notes, the Note Guarantees, the Collat-eral Documents or the Intercreditor Agreements to any provision of the “Description of the Notes” section of the Offering Memorandum to the extent that such provision in that “Description of the Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Notes,
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the Note Guarantees, the Collateral Documents or the Intercreditor Agreements, which intent may be evidenced by an Officers’ Certificate to that effect;
(7) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date hereof;
(8) to allow any Guarantor to execute a supplemental indenture or a Note Guarantee with respect to the Notes, the Collateral Documents and the Intercreditor Agreements (if any);
(9) to add additional Collateral to secure the Notes;
(10) to mortgage, pledge, hypothecate or grant any other Lien in favor of the Trustee or the Notes Collateral Agent for the benefit of the holders of the Notes, as additional security for the payment and performance of all or any portion of the Obligations, on any property or assets, including any which are required to be mortgaged, pledged or hypothecated, or on which a Lien is required to be granted to or for the benefit of the Trustee or the Notes Collateral Agent pursuant to this Indenture, any of the Collateral Documents or otherwise;
(11) to release Liens in favor of the Notes Collateral Agent in the Collateral as pro-vided in Section 12.06 of this Indenture or release any Guarantor from its Guarantee as provided in this Indenture;
(12) evidence and provide for the acceptance and appointment under this Indenture or the Collateral Documents or Intercreditor Agreements (if any) of a successor Trustee or Notes Collateral Agent; or
(13) 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 the Notes or to comply with the rules of any applicable securities depository; 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, includ-ing, without limitation, under Canadian Securities Legislation and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes.
(b) The Intercreditor Agreements (if any) may be amended from time to time with the consent of certain parties thereto. In addition, the Intercreditor Agreements (if any) and the Collateral Documents may be amended from time to time at the sole request and expense of the Company, and without the consent of the Notes Collateral Agent or, during an ABL Trigger Period or a First Lien Trig-ger Period, the ABL Agent or First Lien Credit Facility Agent, as applicable, to add other parties (or any authorized agent thereof or trustee therefor) holding Pari Passu Lien Indebtedness that is incurred in com-pliance with this Indenture, the applicable ABL Revolving Credit Facilities (if any), the applicable Credit Facilities (if any) and the Collateral Documents or as otherwise described in clauses (1) and (2) below.
(1) The Intercreditor Agreements (if any) will provide that the Obligations under the ABL Revolving Credit Facility, the Obligations under this Indenture and the Notes, the Obliga-tions under any Pari Passu Lien Indebtedness and the Obligations under the First Lien Credit Fa-cility may be refinanced or replaced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under the ABL Revolving Credit Facility or the First Lien Credit Facility or any security docu-ment related thereto and this Indenture and the Collateral Documents) of the ABL Agent or any holder of ABL Obligations or any Term Secured Party, all without affecting the Lien priorities
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provided for in the applicable Intercreditor Agreement; provided, however, that the holders of any such refinancing or replacement indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of the applicable Intercreditor Agreement pursuant to such documents or agreements (including amendments or supplements to the applicable Intercreditor Agreement) as the ABL Agent or any Term Agent, as the case may be, shall reasonably request.
(2) In connection with any refinancing or replacement contemplated by the foregoing paragraph, and/or the incurrence of Pari Passu Lien Indebtedness, the applicable Intercreditor Agreement shall be amended at the request and sole expense of the Company, and without the consent of either the ABL Agent or any Term Agent, (a) to add parties (or any authorized agent or trustee therefor) providing any such refinancing or replacement indebtedness, (b) to establish that Liens on any Notes Collateral securing such refinancing or replacement Indebtedness shall have the same priority as the Liens on any Notes Collateral securing the Indebtedness being re-financed or replaced, (c) to establish that the Liens on any ABL Collateral securing such refinanc-ing or replacement indebtedness shall have the same priority as the Liens on any ABL Collateral securing the Indebtedness being refinanced or replaced, all on the terms provided for therein im-mediately prior to such refinancing or replacement, and (d) to facilitate the inclusion of Pari Passu Lien Indebtedness without any further action by any other party thereto to the extent such Pari Passu Lien Indebtedness is permitted to be incurred under the ABL Revolving Credit Facility, the First Lien Credit Facility and this Indenture.
(c) The Trustee and the Notes Collateral Agent shall be entitled to receive an Offic-ers’ Certificate and Opinion of Counsel confirming that all conditions precedent are satisfied with respect to any supplemental indenture or any amendment to any of the Collateral Documents or Intercreditor Agreements (if any) and that such supplemental indenture or amendment to the Collateral Documents or Intercreditor Agreements is authorized or permitted and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.
Without limiting the generality of the foregoing, if the TIA as in effect at the date of the execution and delivery of this Indenture or at any time thereafter becomes amended and if any such amendment requires one or more changes to any of the provisions hereof or the inclusion herein of any additional provisions, or by operation of law is deemed to effect such changes or incorporate such provi-sions by reference or otherwise, this Indenture shall be deemed to have been amended so as to conform to such amendment to the TIA, and the Company, the Guarantors and the Trustee may, without the consent of any Holders, enter into a supplemental indenture to effect or evidence such changes or additional pro-visions.
Section 9.02 With Consent of Holders.
Except as provided in Section 9.01 and below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture (including, without limitation, Sections 3.10, 4.10 and 4.15 hereof), the Notes or the Note Guarantees, the Collateral Documents and the Intercreditor Agree-ments (if any) (subject to the terms of the Intercreditor Agreements (if any)) with the consent of the Hold-ers (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) of at least a majority in aggregate principal amount of the Notes then outstand-ing, other than Notes beneficially owned by the Company of its Affiliates, and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Inden-ture, the Notes, the Notes Guarantees, the Collateral Documents or Intercreditor Agreements (if any) re-lating to the Notes may be waived with the consent of the holders of a majority in aggregate principal amount of the then outstanding Notes voting as a single class (including, without limitation, consents ob-
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tained in connection with a purchase of, or tender offer or exchange offer for, Notes). Section 2.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.
Upon the request of the Company accompanied by either (i) a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture or (ii) an Officers’ Certificate certifying that its Board of Directors has authorized the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Sec-tion 7.02 hereof, the Trustee will join with the Company and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture 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 amended or supplemental Indenture.
It is not necessary for the consent of Holders under this Section 9.02 to approve the par-ticular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent ap-proves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will mail to Holders affected thereby a notice briefly describing the amendment, supple-ment or waiver. Any failure of the Company to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Sub-ject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes or the Note Guarantees. However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not (with re-spect to any Notes held by a non-consenting Holder):
(1) reduce the percentage of the aggregate principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the Stated Maturity of any note or alter the pro-visions with respect to the redemption of the Notes (other than provisions described in Sec-tions 3.10, 4.10 and 4.15 hereof and reductions in the required notice period);
(3) reduce the rate of or change the time for payment of interest, including default in-terest, on any Note;
(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on, the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the Notes;
(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or interest or pre-mium, if any, on, the Notes;
(7) waive a redemption payment with respect to any Note (other than a payment re-quired by Sections 3.10, 4.10 or 4.15 hereof);
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(8) release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; or
(9) make any change in the preceding amendment and waiver provisions.
Without the consent of Holders of 75% in aggregate principal amount of the Notes, an amendment, supplement or waiver may not:
(1) modify any Collateral Document or the provisions in this Indenture dealing with Collateral Documents or application of trust moneys in any manner, taken as a whole, materially adverse to the holders as determined by the Company acting in good faith or otherwise release any Collateral other than in accordance with this Indenture, the Collateral Documents and the In-tercreditor Agreements (if any); or
(2) modify the Intercreditor Agreements (if any) in any manner adverse to the hold-ers in any material respect other than in accordance with the terms of this Indenture, the Collat-eral Documents and the Intercreditor Agreements (if any);
provided, however, it is understood that the right of the Company to take the foregoing actions with such consent, including the release of all or substantially all Collateral securing the Notes and the Note Guar-antees, shall be deemed a feature of the Notes, and each holder of Notes by holding the Notes thereby agrees that no such action should thereby constitute the Notes as a new security.
Section 9.03 [Reserved].
Section 9.04 Revocation and Effect of Consents.
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 por-tion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the con-sent 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 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.
Section 9.05 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 Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amend-ment, 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 9.06 Trustee to Sign Amendments, etc.
The Trustee and the Notes Collateral Agent will sign any amended or supplemental in-denture or any amendment to any of the Collateral Documents or Intercreditor Agreements authorized pursuant to this Article 9 if such amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign any amendment or supplemental in-
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denture until the Board of Directors of the Company approves it (which approval may be certified by an Officers’ Certificate). In executing any such amendment or supplemental indenture, the Trustee and the Notes Collateral Agent shall receive and (subject to Section 7.01 hereof) will be fully protected in con-clusively relying upon, in addition to the documents required by Section 13.04 hereof, an Officers’ Certif-icate and an Opinion of Counsel stating that the execution of such amendment or supplemental indenture is authorized or permitted by this Indenture or the applicable Collateral Document or Intercreditor Agreement and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. Notwithstanding the foregoing, no Opinion of Counsel will be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this In-denture.
ARTICLE 10 NOTE GUARANTEES
Section 10.01 Guarantee.
(a) Subject to this Article 10, each of the Guarantors hereby, jointly and severally, fully and unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes, the Collateral Documents or the obligations of the Company hereunder or thereun-der, that:
(1) the principal of, premium and interest on, the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accord-ance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so guaran-teed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immedi-ately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provi-sions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or de-fense of a Guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.
(c) If any or all of the obligations are not duly performed by the Company and are not performed by the Guarantors for any reason whatsoever, the Guarantors will, jointly and severally, as a separate and distinct obligation, indemnify and save harmless the Notes Collateral Agent, the Trustee
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and the Holders from and against all losses resulting from the failure of the Company to duly perform such obligations. If any or all of the obligations are not duly performed by the Company and are not per-formed by the Guarantors or the Notes Collateral Agent and the Holders are not indemnified, in each case, for any reason whatsoever, such obligations will, as a separate and distinct obligation, be performed by the Guarantors as primary obligors.
(d) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.
(e) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obliga-tions guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstand-ing any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and pay-able by the Guarantors for the purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.
Section 10.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby ir-revocably agree that the obligations of such Guarantor organized under any jurisdiction in the United States will be limited to the maximum amount that will, after giving effect to all other contingent and fixed liabilities of such Guarantor (including, without limitation, any Guarantees under an ABL Revolv-ing Credit Facility) 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 pur-suant to its contribution obligations under this Indenture, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance. Each Guarantor that makes a payment under its Note Guarantee shall be entitled upon payment in full of all guaranteed obligations un-der this Indenture to a contribution from each other Guarantor in an amount equal to such other Guaran-tor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with IFRS
Section 10.03 Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.
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Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.
In the event that the Company or any of its Restricted Subsidiaries creates or acquires any Domestic Subsidiary after the date of this Indenture, if required by Section 4.19 hereof, the Company will cause such Domestic Subsidiary to comply with the provisions of Section 4.19 hereof and this Article 10, to the extent applicable.
Section 10.04 [Reserved.]
Section 10.05 Releases.
Each Note Guarantee by a Guarantor will be automatically and unconditionally released and discharged, and each Restricted Subsidiary and its obligations under the Note Guarantee, this Inden-ture, the Collateral Documents and the Intercreditor Agreement will be released and discharged (other than those that by their terms survive) upon:
(1) (a) any sale, exchange, transfer or disposition of (whether by merger, amalgama-tion, consolidation or the sale of) the Capital Stock of such Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary or the sale of all or substantially all the assets (oth-er than by lease) of such Guarantor, whether or not such Guarantor is the surviving corporation in such transaction to a Person which is not the Company or a Restricted Subsidiary; provided that (x) such sale, exchange, transfer or disposition is made in compliance with Section 4.10 and Arti-cle 5 (to the extent, for the avoidance of doubt, such covenants have not been suspended) and (y) all the obligations of such Guarantor under all Indebtedness of the Company or its Restricted Subsidiaries terminate upon consummation of such transaction; (b) the proper designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary pursuant to the terms of this Indenture; or (c) the Company exercising its legal defeasance option or covenant defeasance option under Article 8 or the Company’s Obligations under this Indenture being discharged in ac-cordance with Article 11;
(2) in the case of clause (1)(a) above only, such Guarantor delivering to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent pro-vided for in this Indenture relating to such transaction have been complied with;
(3) in the case of a guarantee as a result of compliance with the covenant under Sec-tion 4.12 or 4.18, the release, discharge or termination of the guarantee by such Guarantor of the guarantee which resulted in the creation of such Guarantee (it being understood that a release subject to contingent reinstatement is still a release and that if such guarantee is reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee), except a release, discharge or termination by or as a result of payment un-der such guarantee;
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(4) upon the amalgamation, merger or consolidation of any Guarantor with and into the Company or another Guarantor that is the surviving Person (if applicable) in such amalgam-ation, merger or consolidation, or upon the liquidation of such Guarantor following the transfer of all of its assets to the Company or another Guarantor; and
(5) delivery of an Officer’s Certificate to the Trustee that such Guarantor is an Ex-cluded Subsidiary so long as such Guarantor is released from its Guarantee under any senior Credit Facility (it being understood that a release subject to contingent reinstatement is still a re-lease and that is such Subsidiary would no longer meet the definition of Excluded Subsidiary, such Guarantee shall be reinstated to the extent that such Guarantor would then be required to provide a Guarantee).
Any Guarantor not released from its obligations under its Note Guarantee as provided in
this Section 10.05 will remain liable for the full amount of principal of and interest and premium, on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 10.
Section 10.06 Benefits Acknowledged.
Each Guarantor acknowledges that it will receive direct and indirect benefits from the fi-nancing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pur-suant to its Note Guarantee are knowingly made in contemplation of such benefits.
ARTICLE 11 SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as to all Notes is-sued hereunder, when:
(1) either:
(a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has thereto-fore been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or oth-erwise or will become due and payable within one year, and the Company or any Guaran-tor has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, without con-sideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;
(2) in respect of clause (1)(b), no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Indebt-
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edness and, in each case, the granting of Liens to secure such borrowings) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound (other than with respect to the borrowing of funds to be applied concurrently to make the deposit re-quired to effect such satisfaction and discharge and any similar concurrent deposit relating to oth-er Indebtedness, and in each case the granting of Liens to secure such borrowings);
(3) the Company or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee under this In-denture to apply the deposited money toward the payment of the Notes at maturity or on the re-demption date, as the case may be.
In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money has been de-posited with the Trustee pursuant to subclause (b) of clause (1) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and dis-charge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof 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 Company acting as its own Paying Agent), to the Persons entitled thereto, of the principal (and premi-um) 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 Government Securities in accordance with Section 11.01 hereof 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 ap-plication, the Company’s and any Guarantor’s obligations under this Indenture and the Notes shall be re-vived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Company has made any payment of principal of, premium or interest on, any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.
ARTICLE 12 COLLATERAL AND SECURITY
Section 12.01 The Collateral.
(a) The due and punctual payment of the principal of, premium, if any, and interest on the Notes and the Note Guarantees when and as the same shall be due and payable, whether on an in-terest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, interest on the overdue principal of and interest (to the extent permitted by law), if any, on the Notes and the Note Guar-
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antees and performance of all other obligations under this Indenture, including, without limitation, the obligations of the Company set forth in Section 7.07 and Section 8.05 herein, and the Notes and the Note Guarantees, if any, shall be secured by the Collateral.
(b) The Company and the Guarantors hereby agree that the Notes Collateral Agent shall hold the Collateral in trust for the benefit of all of the Holders and the Trustee, in each case pursuant to the terms of the Collateral Documents and the Intercreditor Agreements (if any), and the Notes Collat-eral Agent is hereby authorized to execute and deliver the Collateral Documents and the Intercreditor Agreements (if any).
(c) Each Holder, by its acceptance of any Notes and the Note Guarantees, if any, consents and agrees to the terms of Section 12.09 hereof, the Collateral Documents and the Intercreditor Agreements (if any) (including, without limitation, the provisions providing for foreclosure) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and directs the Notes Collateral Agent to perform its obligations and exercise its rights under the Collateral Documents and the Intercreditor Agreements (if any) in accordance therewith.
(d) The Trustee and each Holder, by accepting the Notes and the Note Guarantees, if any, acknowledges that, as more fully set forth in the Collateral Documents and the Intercreditor Agree-ments (if any), the Collateral as now or hereafter constituted shall be held for the benefit of all the Holders and the Trustee, and that the Lien of this Indenture and the Collateral Documents in respect of the Trustee and the Holders is subject to and qualified and limited in all respects by the Collateral Documents and the Intercreditor Agreements (if any) and actions that may be taken thereunder.
Section 12.02 Further Assurances.
(a) Subject to the limitations set forth in the Collateral Documents, the Company and each of the Guarantors shall execute any and all documents, financing statements, agreements and instru-ments, and take all further action that may be reasonably required under applicable law, or that the Notes Collateral Agent may reasonably request, in order to grant, preserve, protect and perfect the validity and priority of the security interests and Liens created or intended to be created by the Collateral Documents in the Collateral, including, without limitation, by making all filings (including filings of continuation statements and amendments to financing statements that may be necessary to continue the effectiveness of such financing statements). In addition, from time to time, the Company shall and shall cause each of the Guarantors to reasonably promptly secure the obligations under this Indenture and the Collateral Docu-ments by pledging or creating, or causing to be pledged or created, perfected security interests with re-spect to the Collateral.
Section 12.03 After-Acquired Property.
Promptly following the acquisition by the Company or any Guarantor of After-Acquired Property (which, for the avoidance of doubt does not include Excluded Assets), the Company or such Guarantor shall execute and deliver such mortgages, deeds of trust, security instruments, financing state-ments and certificates and opinions of counsel as shall be reasonably necessary to vest in the Notes Col-lateral Agent a perfected security interest in such After-Acquired Property, subject to Permitted Liens and subject to the Intercreditor Agreements (if any) and to have such After-Acquired Property added to the Collateral and thereupon all provisions of this Indenture, the Notes, the Collateral Documents, and the Intercreditor Agreements (if any) relating to the Collateral shall be deemed to relate to such After-Acquired Property to the same extent and with the same force and effect.
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Section 12.04 Impairment of Security Interest.
Subject to the rights of the holders of Permitted Liens, neither the Company nor any of its Restricted Subsidiaries is permitted to take any action, or knowingly or negligently omit to take any ac-tion, which action or omission would or could reasonably be expected to have the result of materially im-pairing the security interest with respect to the Collateral for the benefit of the Trustee and the holders of Notes.
Any release of Collateral in accordance with the provisions of this Indenture and the Collateral Documents will not be deemed to impair the security interest under this Indenture and any Per-son may rely on such provision in delivering a certificate requesting release so long as all other provisions of this Indenture with respect to such release have been complied with.
Section 12.05 [Reserved].
Section 12.06 Release of Liens on the Collateral.
(a) The Liens on the Collateral will, automatically and without the need for further action by any Person, be released with respect to the Notes:
(A) to enable the disposition of such property or assets (other than to the Company or a Guarantor) to the extent not prohibited under the covenant described in Section 4.10;
(B) in the case of a Guarantor that is released from its Guarantee, the release of the property and assets of such Guarantor;
(C) pursuant to Section 9.02 hereof;
(D) If, during an ABL Trigger Period, in connection with any sale, lease, exchange, transfer or other disposition of any ABL Collateral permitted under the terms of an ABL Revolv-ing Credit Facility and not expressly prohibited under the terms of this Indenture, if any (other than in connection with the exercise of the ABL Agent’s remedies in respect of the ABL Collat-eral), the ABL Agent, for itself or on behalf of any holder of ABL Obligations, releases any of its Liens on any part of the ABL Collateral (other than (i) in connection with the discharge of all ABL Obligations and (ii) after the occurrence and during the continuance of any “event of de-fault” under this Indenture) then the Liens, if any, securing the Notes on such ABL Collateral shall be automatically released. During an ABL Trigger Period, the second-priority Liens on the ABL Collateral securing the Notes shall also terminate and be released automatically to the extent the first-priority Liens on the ABL Collateral are released by the ABL Agent in connection with a sale, transfer or disposition of ABL Collateral that occurs in connection with the foreclosure of, or other exercise of remedies with respect to, such ABL Collateral by the ABL Agent (except with respect to any proceeds of such sale, transfer or disposition that remain after satisfaction in full of the ABL Obligations);
(E) If, during a First Lien Trigger Period, in connection with any sale, lease, ex-change, transfer or other disposition of any Collateral permitted under the terms of a First Lien Credit Facility and not expressly prohibited under the terms of the Indenture, if any (other than in connection with the exercise of the First Lien Credit Facility Agent’s remedies in respect of the Collateral), the First Lien Credit Facility Agent, for itself or on behalf of any holder of First Lien Obligations, releases any of its Liens on any part of the Collateral (other than (i) in connection with the discharge of all First Lien Obligations and (ii) after the occurrence and during the con-
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tinuance of any “event of default” under the Indenture) then the Liens, if any, securing the Notes on such Collateral shall be automatically released. During a First Lien Trigger Period, the second-priority Liens on the Collateral securing the Notes shall also terminate and be released automati-cally to the extent the first-priority Liens on the Collateral are released by the First Lien Credit Facility Agent in connection with a sale, transfer or disposition of Collateral that occurs in con-nection with the foreclosure of, or other exercise of remedies with respect to, such Collateral by the First Lien Credit Facility Agent (except with respect to any proceeds of such sale, transfer or disposition that remain after satisfaction in full of the First Lien Obligations); and
(F) upon (i) payment in full of the principal of, together with accrued and unpaid in-terest on, the Notes and all other Obligations under this Indenture, the Guarantees under this In-denture and the Collateral Documents that are due and payable at or prior to the time such princi-pal, together with accrued and unpaid interest, is paid or (ii) a legal defeasance or covenant defea-sance under Article 8 of this Indenture or upon satisfaction and discharge of this Indenture as set forth in Article 11 hereof.
(b) Without limiting the foregoing, to the extent any action of the Trustee and/or Notes Collateral Agent is requested in connection with any release, to the extent applicable, the Company and each Guarantor, as applicable, will furnish to the Trustee and the Notes Collateral Agent, prior to each proposed release of Collateral pursuant to the Collateral Documents and this Indenture:
(A) an Officers’ Certificate requesting such release, including a statement to the ef-fect that all conditions precedent provided for in this Indenture and the Collateral Documents to such release have been complied with including the delivery to the Trustee and Notes Collateral Agent of all documents required under this Section 12.06(b);
(B) a form of such release (which release shall be in form reasonably satisfactory to the Trustee and Notes Collateral Agent and shall provide that the requested release is without re-course, representation or warranty to the Trustee and Notes Collateral Agent); and
(C) all documents required by this Indenture, the Collateral Documents and the Inter-creditor Agreements.
Upon compliance by the Company or the Guarantors, as the case may be, with the condi-tions precedent set forth above, and upon delivery by the Company or such Guarantor to the Trustee of an Opinion of Counsel to the effect that such conditions precedent have been complied with, the Trustee or the Notes Collateral Agent shall promptly cause to be released and reconveyed to the Company, or the Guarantors, as the case may be, the released Collateral.
(c) The release of any Collateral in accordance with the terms of this Indenture and the Collateral Documents shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof or affect the Lien of this Indenture or the Collateral Documents if and to the ex-tent the Collateral is released pursuant to this Indenture, the Collateral Documents or the Intercreditor Agreement or upon the termination of this Indenture. Any person may rely on this Section 12.06(c) in delivering a certificate requesting release of any collateral.
Section 12.07 Authorization of Actions to Be Taken by the Trustee or the Notes Collateral Agent Under the Collateral Documents.
(a) Subject to the provisions of the Collateral Documents and the Intercreditor Agreements (if any), each of the Trustee or the Notes Collateral Agent may (but shall not be obligated to),
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in its sole discretion and without the consent of the Holders, on behalf of the Holders, take all actions it deems necessary or appropriate in order to (a) enforce any of its rights or any of the rights of the Holders under the Collateral Documents and the Intercreditor Agreements (if any) and (b) collect and receive any and all amounts payable in respect of the Collateral in respect of the obligations of the Company and the Subsidiaries hereunder and thereunder. Subject to the provisions of the Collateral Documents and the Intercreditor Agreements (if any), the Trustee or the Notes Collateral Agent shall have the power to insti-tute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Collateral Documents, the Intercredi-tor Agreements (if any) or this Indenture, and such suits and proceedings as the Trustee or the Notes Col-lateral Agent may deem expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitu-tional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders or the Trustee).
(b) The Trustee or the Notes Collateral Agent shall not be responsible or liable for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or en-forceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Trustee or the Notes Collateral Agent shall have no responsibility or liability for recording, filing, re-recording or refiling any financing statement, contin-uation statement, document, instrument or other notice in any public office at any time or times or to oth-erwise take any action to perfect or maintain the perfection of any security interest granted to it under the Collateral Documents or otherwise.
(c) Where any provision of this Indenture requires that additional property or assets be added to the Collateral, the Company and the relevant Guarantor shall deliver to the Trustee or the Notes Collateral Agent the following:
(1) a written notice from the Company of such Collateral;
(2) the form of instrument adding such Collateral, which, based on the type and loca-tion of the property subject thereto, shall be in substantially the form of the applicable Collateral Documents entered into on the date of this Indenture, with such changes thereto as the Company shall consider appropriate, or in such other form as the Company shall deem proper; provided that any such changes or such form are administratively satisfactory to the Trustee or the Notes Col-lateral Agent;
(3) an Officers’ Certificate to the effect that the Collateral being added is in the form, consists of the assets and is in the amount or otherwise has the fair market value required by this Indenture;
(4) an Officers’ Certificate to the effect that all conditions precedent provided for in this Indenture to the addition of such Collateral have been complied with; and
(5) such financing statements, PPSA statements or other documents or instruments, if any, as the Company shall deem necessary to perfect the Notes Collateral Agent’s security in-terest in such Collateral.
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(d) The Trustee or the Notes Collateral Agent, in giving any consent or approval un-der the Collateral Documents or the Intercreditor Agreements (if any), shall receive, as a condition to such consent or approval, an Officers’ Certificate and an Opinion of Counsel to the effect that the action or omission for which consent or approval is to be given is permitted by the provisions of this Indenture, the Collateral Documents and the Intercreditor Agreements (if any), and the Trustee or the Notes Collateral Agent shall be fully protected in giving such consent or approval on the basis of such Officers’ Certificate and Opinion of Counsel.
Section 12.08 Collateral Accounts.
(a) The Trustee is authorized to receive any funds for the benefit of the Holders dis-tributed under, and in accordance with, the Collateral Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture, the Collateral Documents and the Intercreditor Agreement.
(b) Within sixty (60) days after the Issue Date, or as soon as practicable thereafter upon the use of commercially reasonable efforts, the Company shall establish the Collateral Account, which shall be under the sole dominion and control of the Notes Collateral Agent. The Collateral Ac-count shall be a trust account and may be established and maintained by the Notes Collateral Agent at one of its corporate trust offices and all proceeds in respect of the Notes Collateral shall be credited thereto. All cash and Cash Equivalents received by the Trustee from Asset Sales or Recovery Events in respect of Notes Collateral, or from foreclosures of or sales of Notes Collateral, issuances of Additional Notes and other awards or proceeds pursuant to the Collateral Documents, including earnings, revenues, rents, is-sues, profits and income from the Notes Collateral received pursuant to the Collateral Documents, shall be deposited in the Collateral Account to the extent required by this Indenture, the Collateral Documents or the Intercreditor Agreement, and thereafter shall be held, applied and/or disbursed by the Notes Collat-eral Agent in accordance with the terms of this Indenture (including, without limitation, Section 3.05, Section 6.10 and Section 12.08(a)). In connection with any and all deposits to be made into the Collateral Account under this Indenture, the Notes Collateral Agent shall receive an Officers’ Certificate directing the Notes Collateral Agent to make such deposit.
(c) Pending the distribution of funds in the Collateral Account in accordance with the provisions hereof and provided that no Event of Default shall have occurred and be continuing, the Company may direct the Notes Collateral Agent in writing to invest such funds in Cash Equivalents spec-ified in such direction, such investments to mature by the times such funds are needed hereunder and such direction to certify that such funds constitute Cash Equivalents and that no Event of Default shall have occurred and be continuing. So long as no Event of Default shall have occurred and be continuing, the Company may direct the Notes Collateral Agent in writing to sell, liquidate or cause the redemption of any such investments and to transmit the proceeds to the Company or its designee, in each case, to the extent permitted under Section 3.05 hereof, such direction to certify that no Event of Default shall have occurred and be continuing. Any gain or income on any investment of funds in the Collateral Account shall be credited to the Collateral Account. The Notes Collateral Agent shall have no liability for the se-lection of any Cash Equivalent or for any loss incurred in connection with any investment or any sale, liquidation or redemption thereof made in accordance with the provisions of this Section 12.08(c).
Section 12.09 Appointment and Authorization of each of The Bank of New York Mellon and BNY Trust Company of Canada as Notes Collateral Agent.
(a) The Bank of New York Mellon is hereby designated and appointed as the U.S. Collateral Agent of the Holders under the Collateral Documents governed by the laws of the state of New
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York, and is authorized as the U.S. Collateral Agent for such Holders to execute and enter into each such Collateral Document and all other instruments relating to such Collateral Documents and (i) to take action and exercise such powers as are expressly required or permitted hereunder and under such Collateral Documents and all instruments relating hereto and thereto including, without limitation, entering into any amendments, supplements, modifications, joinders or intercreditor agreements relating thereto and (ii) to exercise only such powers and perform such duties as are in each case, expressly delegated to the Notes Collateral Agent by the terms hereof and thereof together with such other powers as are reasonably inci-dental hereto and thereto.
(b) BNY Trust Company of Canada is hereby designated and appointed as the Cana-dian Collateral Agent of the Holders under the Collateral Documents governed by the laws of any Cana-dian jurisdiction, and is authorized as the Canadian Collateral Agent for such Holders to execute and enter into each such Collateral Document and all other instruments relating to such Collateral Documents and (i) to take action and exercise such powers as are expressly required or permitted hereunder and under such Collateral Documents and all instruments relating hereto and thereto including, without limitation, entering into any amendments, supplements, modifications, joinders or intercreditor agreements relating thereto and (ii) to exercise only such powers and perform such duties as are in each case, expressly dele-gated to the Notes Collateral Agent by the terms hereof and thereof together with such other powers as are reasonably incidental hereto and thereto.
(c) Notwithstanding any provision to the contrary elsewhere in this Indenture or the Collateral Documents, the Notes Collateral Agent shall not have any duties or responsibilities except those expressly set forth herein nor therein or any fiduciary relationship with any Holder, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture or any Collateral Document or otherwise exist against the Notes Collateral Agent.
(d) The Notes Collateral Agent shall incur no liability to anyone in acting upon any signature, instrument, statement, notice, resolution, request, direction, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and reasonably believed by it to be signed by the proper party or parties. The Notes Collateral Agent may exercise any of its rights or powers hereunder or perform any of its duties hereunder either directly or by or through agents or at-torneys, and the Notes Collateral Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed hereunder with due care by it. Anything in this Indenture or Col-lateral Documents notwithstanding, in no event shall the Notes Collateral Agent be liable for special, indi-rect, punitive or consequential damage of any kind whatsoever (including but not limited to lost profits), even if the Notes Collateral Agent has been advised of such loss or damage and regardless of the form of action. The Company and Guarantors, shall, jointly and severally, indemnify and hold harmless the Notes Collateral Agent, its directors, officers, agents and employees with respect to any and all expenses, losses, damages, liabilities, demands, charges, causes of action, judgments and claims of any nature (including the reasonable fees and expenses of counsel and other experts) in respect of or arising from any acts or omissions performed or omitted by the Notes Collateral Agent, its directors, officers, agents or employees hereunder or under the Collateral Documents or under any other agreement executed in connection there-with, or otherwise incurred in connection with the transactions contemplated herein or therein, without willful misconduct or gross negligence hereunder or under the Collateral Documents or under any other agreement executed in connection therewith.
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ARTICLE 13 MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA §318(c), the imposed duties will control.
Section 13.02 Notices.
Any notice, direction, instruction, order or communication by the Company, any Guaran-tor or the Trustee to the others is duly given if in writing and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaran-teeing next day delivery, to the others’ address:
If to the Company or any Guarantor:
Ainsworth Lumber Co. Ltd. Suite 3194, Bentall IV 1055 Dunsmuir Street PO Box 49307 Vancouver, BC Canada V7X 1L3 Facsimile No.: (604) 661-3201 Attention: Chief Financial Officer
With a copy to:
Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Facsimile No.: (212) 310-8007 Attention: Corey R. Chivers, Esq.
If to the Trustee or U.S. Collateral Agent:
The Bank of New York Mellon 101 Barclay Street, Floor 4E New York, New York 10286 Facsimile No.: (212) 815-5366/5390 Attention: International Corporate Trust
If to the Canadian Collateral Agent:
BNY Trust Company of Canada 320 Bay St, 11th Floor Toronto, ON M5H 4A6 Attention: Transaction Management Group
The Company, any Guarantor or the Trustee, by notice to the others, may designate addi-tional or different addresses for subsequent notices or communications.
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The Trustee, Canadian Collateral Agent and U.S. Collateral Agent shall be entitled to treat a facsimile, pdf or e-mail communication or communication by other similar electronic means in a form satisfactory to the Trustee, Canadian Collateral Agent or U.S. Collateral Agent, as applicable, (“Electronic Methods”) from a person purporting to be (and whom such Trustee, Canadian Collateral Agent or U.S. Collateral Agent, acting reasonably, believes in good faith to be) the authorized representa-tive of the Company, as sufficient instructions and authority of the Company for the Trustee, Canadian Collateral Agent or U.S. Collateral Agent to act and shall have no duty to verify or confirm that person is so authorized. The Trustee, Canadian Collateral Agent and U.S. Collateral Agent shall have no liability for any losses, liabilities, costs or expenses incurred by it as a result of such reliance upon or compliance with such instructions or directions. The Company agrees: (i) to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, Canadian Collateral Agent and U.S. Collateral Agent, including without limitation the risk of the Trustee, Canadian Collateral Agent and/or U.S. Collateral Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various meth-ods of transmitting instructions to the Trustee, Canadian Collateral Agent and U.S. Collateral Agent and that there may be more secure methods of transmitting instructions than the method(s) selected by the Company; and (iii) that the security procedures (if any) to be followed in connection with its transmis-sion of instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances.
All notices and communications (other than those sent to Holders, Trustee or Notes Col-lateral Agent) will be deemed to have been duly given: at the time delivered by hand, if personally deliv-ered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Notices to the Trustee and/or Notes Col-lateral Agent are only deemed received upon actual receipt thereof.
Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its ad-dress shown on the register kept by the Registrar. Any notice or communication will also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time pre-scribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it will mail a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:
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(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trus-tee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opin-ion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trus-tee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opin-ion of such counsel, all such conditions precedent and covenants have been satisfied.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant pro-vided for in this Indenture must include:
(1) a statement that the Person making such certificate or opinion has read such cov-enant 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 Person, he or she has made such examina-tion or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied (and, in the case of a Opinion of Counsel, may be limited to reliance on an officer’s certificate as to matters of fact); and
(4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders.
No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor or any of their Parent Entities, as such, will have any liability for any obliga-tions of the Company or the Guarantors under the Notes, this Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accept-ing a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the U.S. federal securi-ties laws or Canadian Securities Legislation.
Section 13.08 Governing Law; Jury Trial Waiver
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE COMPANY, THE TRUSTEE, THE NOTES COLLATERAL AGENT AND THE HOLDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
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PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 13.09 Jurisdiction.
Each of the parties hereto agrees that any suit, action or proceeding brought by any other party hereto arising out of or based upon this Indenture, the Note Guarantees or the Notes may be institut-ed 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 such suit, action or proceeding. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection to any suit, action, or proceeding that may be brought in connec-tion with this Indenture, the Note Guarantee 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. Each of the parties hereto agrees that final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon it, and may be enforced in any court to the jurisdiction of which such Person is subject by a suit upon such judgment; provided, however, that service of process is effected upon the Company or the applicable Guarantor, as the case may be, in the manner provided by this Indenture. Each of the Company and any Guarantor not organized in the United States has appointed CT Corporation System, 111 Eighth Avenue, New York, NY 10011, USA as its authorized agent (the “Authorized Agent”), upon whom process may be served in any suit, action or proceeding arising out of or based upon this Indenture, the Note Guarantees or the Notes or the transactions contemplated herein which may be instituted in any state or Federal court in the Borough of Manhattan, New York, New York, by any Holder or the Trustee, and expressly accepts the non-exclusive jurisdiction of any such court in respect of any such suit, action or proceeding. Each of the Company and the Guarantors not organized in the United States hereby represents and warrants that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of pro-cess, and the Company and each Guarantor not organized in the United States agrees to take any and all action, including the filing of any and all documents, that may be reasonably necessary to continue such respective appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Company and the Guarantors not organized in the United States.
Section 13.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.11 Successors.
All agreements of the Company in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.
Section 13.12 Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or im-paired thereby.
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Section 13.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement. The exchange of copies of this Inden-ture and of signature pages by facsimile or email (in PDF format or otherwise) transmission shall consti-tute 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 email (in PDF format or otherwise) shall be deemed to be their original signatures for all purposes.
Section 13.14 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.
Section 13.15 Force Majeure.
In no event shall the Trustee or Notes Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or in-directly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and in-terruptions, loss or malfunctions of utilities, communications or computer (software and hardware) ser-vices; it being understood that the Trustee and Notes Collateral Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practica-ble under the circumstances.
Section 13.16 U.S.A. Patriot Act.
The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and mon-ey laundering, is required to obtain, verify, and record information that identifies each person or legal en-tity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
Section 13.17 Intercreditor Agreements.
Notwithstanding anything herein to the contrary, the liens and security interests granted to the Notes Collateral Agent pursuant to the Collateral Documents and the exercise of any right or reme-dy with respect thereto by the Notes Collateral Agent hereunder are subject to the provisions of the Inter-creditor Agreements (if any). In the event of any conflict between the terms of the Intercreditor Agree-ments (if any) and the terms of this Indenture, the terms of the Intercreditor Agreements (if any) shall govern and control.
[Signatures on following page]
SIGNATURES
Dated as of November 27, 2012
AINSWORTH LUMBER CO. LTD.
By: “Rick Eng”Name: Rick EngTitle: Chief Financial Officer
AINSWORTH ENGINEERED CORP.,0737562 BC LTD., as Guarantors
By: “Rick Eng”Name: Rick EngTitle: Chief Financial Officer
AINSWORTH CORP.,as Guarantor
By: “Rick Eng”Name: Rick EngTitle: Chief Financial Officer
AINSWORTH GP LTD.,as Guarantor
By: “Rick Eng”Name: Rick EngTitle: Chief Financial Officer
FOOTNER FOREST PRODUCTS LTD.,As Guarantor
By: “Monika Russell”Name: Monika RussellTitle: Director
AINSWORTH ENGINEERED CANADA LIMITED PARTNERSHIP,as Guarantor
by its General Partner, Ainsworth GP Ltd.
By: “Rick Eng”Name: Rick EngTitle: Chief Financial Officer
THE BANK OF NEW YORK MELLON, asTrustee
By: “John T. Needham Jr.”Name: John T. Needham Jr.Title: Vice President
THE BANK OF NEW YORK MELLON, as NotesCollateral Agent
By: “John T. Needham Jr.”Name: John T. Needham Jr.Title: Vice President
BNY TRUST COMPANY OF CANADA, as Notes Canadian Collateral Agent
By: “Steven Broude”Name: Steven BroudeTitle: Vice President
A-1
EXHIBIT A
[Face of Note]
CUSIP/ISIN____________*
7.5% Senior Secured Notes due 2017
No. ___ $____________*
AINSWORTH LUMBER CO. LTD.
promises to pay to [ ] or registered assigns,
the principal sum of __________________________________________________________ DOLLARS [(or such other amount as set forth on the Schedule of Exchanges of Interests in the Global Note attached hereto)] on December 15, 2017.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
AINSWORTH LUMBER CO. LTD.
By: Name: Title:
This is one of the Notes referred to in the within-mentioned Indenture: The Bank of New York Mellon, as Trustee
By: _____________________________ Authorized Signatory
Dated: _____________________________
* This Global Note represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon, the initial amount of which is specified on the “Schedule of Exchanges of Inter-ests in the Global Note” attached hereto, which may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.
* 144A CUSIP: 008914 AE3
Reg. S CUSIP: C01023 AH0 IAI CUSIP: 008914 AF0
144A ISIN: US008914AE36 Reg. S ISIN: USC01023AH03 IAI ISIN: US008914AF01
A-2
[Back of Note] 7.5% Senior Secured Notes due 2017
[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Temporary Regulation S Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the OID Legend, if applicable, pursuant to the provisions of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the Indenture re-ferred to below unless otherwise indicated.
(1) INTEREST. Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada (the “Company”), promises to pay interest on the principal amount of this Note at 7.5% per annum from November 27, 2012 until maturity. The Company will pay interest semi-annually in ar-rears on June 15 and December 15 of each year (each, an “Interest Payment Date”), or if any such day is not a Business day, on the next succeeding business day as if made on such Interest Payment Date. Inter-est on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of inter-est, and if this Note is authenticated between a record date referred to on the face hereof and the next suc-ceeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be June 15, 2013. The Company will pay inter-est (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Solely for purposes of disclosure under the Interest Act (Canada), where interest is calculated pursuant thereto at a rate based upon a year of 360 days (the “First Rate”), the rate or percentage of interest on a yearly basis is equivalent to such First Rate multiplied by the actual number of days in the year divided by 360.
(2) METHOD OF PAYMENT. The Company will pay interest on the Notes (except de-faulted interest) to the Persons who are registered Holders at the close of business on the June 1 or De-cember 1 (whether or not a business day) next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and interest at the office or agency of the Company maintained for such purpose within or with-out the City and State of New York, or, at the option of the Company, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that pay-ment by wire transfer of immediately available funds will be required with respect to principal of and in-terest and premium on, all Global Notes and all other Notes the Holders of which are holding at least US$1,000,000 principal amount and who have provided wire transfer instructions to the Company or the Paying Agent at least 15 days prior to the respective Interest Payment Date. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon, the Trustee and U.S. Collateral Agent under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.
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(4) INDENTURE. The Company issued the Notes under an Indenture dated as of No-vember 27, 2012 (the “Indenture”) between the Company, the Guarantors from time to time party thereto, the Trustee, the U.S. Collateral Agent and Canadian Collateral Agent. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.
(5) OPTIONAL REDEMPTION.
(a) At any time prior to December 15, 2014, the Company may on any one or more occasions redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a re-demption price equal to 100% of the principal amount of the Notes and Additional Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest to, but excluding, the date of redemption.
(b) The Company may redeem up to 10% of the aggregate principal amount of the Notes originally issued under the Indenture in any twelve-month period, commencing with the twelve-month period beginning on the Issue Date and for each twelve month period thereafter through but prior to December 15, 2014, at a redemption price equal to 103% of their principal amount, plus accrued and unpaid interest on the Notes to be redeemed to, but excluding, the redemption date.
(c) On or after December 15, 2014 the Company may on any one or more occasions redeem all or a part of the Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest on the Notes redeemed to, but excluding, the applicable redemption date, if redeemed during the twelve-month period beginning on June 1 of the years indicated below:
Year Percentage 2014 103.750% 2015 101.875% 2016 and thereafter 100.000%
Unless the Company 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.
(d) At any time prior to December 15, 2014, the Company may on any one or more occasions redeem up to 40% of the aggregate principal amount of Notes issued under the Indenture in an amount equal to the net cash proceeds of an Equity Offering at a redemption price equal to 107.500% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but excluding, the redemption date; provided that (i) at least 60% in aggregate principal amount of the Notes originally issued under the Indenture (including any Additional Notes but excluding Notes held by the Company and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption and (ii) such redemption occurs within 90 days of the date of the closing of such Equity Offering.
(e) Except pursuant to subparagraphs (a), (b), (c) and (d) of this Paragraph 5 and pursuant to Paragraph 6, the Notes will not be redeemable at the Company’s option prior to December 15, 2014.
(6) TAX REDEMPTION. Upon the occurrence of certain changes in tax law, the Com-pany may redeem at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, and all Additional Amounts (if any) then due and that will become due on the date of redemption as a result of the redemption or otherwise.
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(7) MANDATORY REDEMPTION. The Company is not required to make mandatory re-demption or sinking fund payments with respect to the Notes.
(8) REPURCHASE AT THE OPTION OF HOLDERS. The Company may be required to make an offer to repurchase all or any part of the Holders’ Notes upon the occurrence of a Change of Control or following an Asset Sale or Recovery Event, in each case on the terms set forth in the Inden-ture.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder (with a copy to the Trustee) whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defea-sance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than US$2,000 may be redeemed in part but only in whole multiples of US$1,000, unless all of the Notes held by a Holder are to be redeemed.
(10) RANKING AND COLLATERAL. The Notes will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture and the Collateral Documents.
(11) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form with-out coupons in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Reg-istrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or por-tion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before the mailing of a notice of redemption of Notes to be redeemed or during the period between a rec-ord date and the corresponding Interest Payment Date.
(12) PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.
(13) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the In-denture, the Notes or the Note Guarantees, the Collateral Documents and the Intercreditor Agreements (if any) (subject to the terms of the Intercreditor Agreements (if any)), may be amended or supplemented as set forth in Article 9 of the Indenture.
(14) DEFAULTS AND REMEDIES. Events of Default shall be as set forth in Article 6 of the Indenture. If any Event of Default occurs and is continuing, other than an Event of Default specified in clause (7) or (8) of Section 6.01 of the Indenture, the Trustee or the Holders of at least 25% in aggre-gate principal amount of the then outstanding Notes may declare all the Notes to be due and payable im-mediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company, any Restricted Subsidiary of the Company that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediate-ly without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Hold-ers notice of any continuing Default or Event of Default (except a Default or Event of Default relating to
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the payment of principal or interest or premium) if it determines that withholding notice is in their inter-est.
(15) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affili-ates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.
(16) NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issu-ance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.
(17) INTERCREDITOR AGREEMENTS. Each Holder agrees that the Liens in favor of the Notes Collateral Agent on Collateral Securing the Notes and the Note Guarantees are subject to the terms of the Intercreditor Agreements (if any). The Holders hereby authorize the Trustee and the Notes Collat-eral Agent to enter into the Intercreditor Agreements (if any) on behalf of the Holders and agree that the Holders shall comply with the provisions of the Intercreditor Agreements (if any) applicable to them in their capacities as such to the same extent as if the Holders were parties thereto. In the event of any con-flict or inconsistency among the provisions of this Indenture or the Security Agreement, on the one hand, and the Intercreditor Agreements (if any), on the other hand, the provisions of the Intercreditor Agree-ments (if any) shall control.
(18) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
(19) 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 entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(20) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as con-tained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.
(21) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:
Ainsworth Lumber Co. Ltd. Suite 3194, Bentall IV 1055 Dunsmuir Street PO Box 49307 Vancouver, BC
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Canada V7X 1L3 Attention: Chief Financial Officer.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: (Insert assignee’s legal name)
(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
and irrevocably appoint to transfer this Note on the books of the Company. The agent may substitute another to act for him.
Date: _______________
Your Signature: (Sign exactly as your name appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
� Section 4.10 � Section 4.15
If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:
$_______________
Date: _______________
Your Signature: (Sign exactly as your name appears on the face of this Note)
Tax Identification No.:
Signature Guarantee*: _________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE†
The initial aggregate principal amount of Notes evidenced by the Global Note to which this Schedule is attached is $__________. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Date of Ex-change
Amount of decrease in
Principal Amount of
this Global Note
Amount of in-crease in
Principal Amount of
this Global Note
Principal Amount of this Global
Note following such
decrease (or increase)
Signature of author-ized
signatory of Trustee or
Custodian
† This schedule should be included only if the Note is issued in global form.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ainsworth Lumber Co. Ltd. Suite 3194, Bentall IV 1055 Dunsmuir Street PO Box 49307 Vancouver, BC Canada V7X 1L3 Attention: Chief Financial Officer Fax No.: (604) 661-3201
The Bank of New York Mellon 101 Barclay Street, Floor 4E New York, New York 10286 Attention: International Corporate Trust Telephone No.: [_] Fax No.: [_] Email: [_]
Re: 7.5% Senior Secured Notes due 2017
Reference is hereby made to the Indenture, dated as of November 27, 2012 (the “Inden-ture”), between Ainsworth Lumber Co. Ltd., as issuer (the “Company”), the guarantors party thereto from time to time, The Bank of New York Mellon, as trustee and U.S. Collateral Agent and BNY Trust Com-pany of Canada, as Canadian Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
___________________ (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $___________ in such Note[s] or interests (the “Transfer”), to ___________________________ (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. �Check if Transferee will take delivery of a beneficial interest in the 144A
Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securi-ties Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institu-tional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note or the Restricted Definitive Note and in the Indenture and the Securities Act.
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2. �Check if Transferee will take delivery of a beneficial interest in the Regu-
lation S Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accord-ingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facili-ties of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed sell-ing efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regula-tion S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registra-tion requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expira-tion of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in ac-cordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be sub-ject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note or the Restricted Definitive Note and in the Indenture and the Securities Act.
3. �Check if Transferee will take delivery of a beneficial interest in the IAI
Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other
than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer re-strictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
(a) �such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
or
(b) �such Transfer is being effected to the Company or a Subsidiary thereof;
or
(c) �such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Se-curities Act;
or
(d) �such Transfer is being effected to an Institutional Accredited Investor and pur-suant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, an Opinion of Counsel provided by the Trans-feror or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the
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proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Place-ment Legend printed on the IAI Global Note or the Restricted Definitive Notes and in the Inden-ture and the Securities Act.
4. �Check if Transferee will take delivery of a beneficial interest in an Unre-
stricted Global Note or of an Unrestricted Definitive Note.
(a) �Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effect-ed pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the trans-fer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Place-ment Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) �Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being ef-fected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compli-ance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Pri-vate Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) �Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is be-ing effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
5. �Check if Transferor is an Affiliate of the Company.
6. �Check if Transferee is an Affiliate of the Company.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
___________________________________________ [Insert Name of Transferor]
By: Name: Title:
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Dated: _______________________
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) �a beneficial interest in the:
(i) �144A Global Note (CUSIP _________), or
(ii) �Regulation S Global Note (CUSIP _________), or
(iii) �IAI Global Note (CUSIP _________), or
(b) �a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) �a beneficial interest in the:
(i) �144A Global Note (CUSIP _________), or
(ii) �Regulation S Global Note (CUSIP _________), or
(iii) �IAI Global Note (CUSIP _________), or
(iv) �Unrestricted Global Note (CUSIP _________); or
(b) �a Restricted Definitive Note; or
(c) �an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ainsworth Lumber Co. Ltd. Suite 3194, Bentall IV 1055 Dunsmuir Street PO Box 49307 Vancouver, BC Canada V7X 1L3 Attention: Chief Financial Officer Fax No.: (604) 661-3201
The Bank of New York Mellon 101 Barclay Street, Floor 4E New York, New York 10286 Attention: International Corporate Trust Telephone No.: [_] Fax No.: [_] Email: [_]
Re: 7.5% Senior Secured Notes due 2017
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of November 27, 2012 (the “Inden-ture”), between Ainsworth Lumber Co. Ltd., as issuer (the “Company”), the guarantors party thereto from time to time, The Bank of New York Mellon, as trustee and U.S. Collateral Agent and BNY Trust Com-pany of Canada as Canadian Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
__________________________ (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $____________ in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restrict-
ed Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global
Note
(a) �Check if Exchange is from beneficial interest in a Restricted Global Note
to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the trans-fer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act
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and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(b) �Check if Exchange is from beneficial interest in a Restricted Global Note
to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effect-ed in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act, (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States and (v) the Owner is not an affiliate (as defined in Rule 144) of the Compa-ny.
(c) �Check if Exchange is from Restricted Definitive Note to beneficial interest
in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been ef-fected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act, (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States and (v) the Owner is not an affiliate (as defined in Rule 144) of the Company.
(d) �Check if Exchange is from Restricted Definitive Note to Unrestricted De-
finitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unre-stricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act, (iv) the Unrestricted De-finitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States and (v) the Owner is not an affiliate (as defined in Rule 144) of the Company.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
(a) �Check if Exchange is from beneficial interest in a Restricted Global Note
to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without trans-fer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Secu-rities Act.
(b) �Check if Exchange is from Restricted Definitive Note to beneficial interest
in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] 144A Global Note, IAI Global Note, Regulation S
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Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in com-pliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in ac-cordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
3. �Check if Owner is an affiliate of the Company.
4. �Check if Owner is exchanging this Note in connection with an expected
transfer to an affiliate of the Company.
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This certificate and the statements contained herein are made for your benefit and the
benefit of the Company.
___________________________________________ [Insert Name of Transferor]
By: Name: Title:
Dated: ______________________
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EXHIBIT D
FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Ainsworth Lumber Co. Ltd. Suite 3194, Bentall IV 1055 Dunsmuir Street PO Box 49307 Vancouver, BC Canada V7X 1L3 Attention: Chief Financial Officer Telephone No.: [_] Fax No.: (604) 661-3201
The Bank of New York Mellon 101 Barclay Street, Floor 4E New York, New York 10286 Attention: International Corporate Trust Telephone No.: [_] Fax No.: [_] Email: [_]
Re: 7.5% Senior Secured Notes due 2017
Reference is hereby made to the Indenture, dated as of November 27, 2012 (the “Inden-ture”), between Ainsworth Lumber Co. Ltd., as issuer (the “Company”), the guarantors party thereto from time to time, The Bank of New York Mellon, as trustee and U.S. Collateral Agent and BNY Trust Com-pany of Canada as Canadian Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate principal amount of:
(a) �a beneficial interest in a Global Note, or
(b) �a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein ex-cept in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).
2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts
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for which we are acting as hereinafter stated, that if we should sell the Notes or any interest there-in, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provi-sions of Rule 144(d) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you such certifications, legal opinions and other infor-mation as you may reasonably require to confirm that the proposed sale complies with the forego-ing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.
4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our invest-ment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.
You are entitled to rely upon this letter and are irrevocably authorized to produce this let-ter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
_____________________________________________ [Insert Name of Accredited Investor]
By: Name: Title:
Dated: ______________________
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EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of November 27, 2012 (the “Indenture”) among Ainsworth Lumber Co. Ltd., (the “Company”), the Guarantors party thereto, The Bank of New York Mellon, as trustee (the “Trustee”) and U.S. Collateral Agent, and BNY Trust Company of Canada, as Ca-nadian Collateral Agent, (a) the due and punctual payment of the principal of, premium, and interest on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Company to Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accord-ance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. The obligations of the Guarantors to Holders and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Inden-ture for the precise terms of the Note Guarantee.
Capitalized terms used but not defined herein have the meanings given to them in the In-denture.
[Name of Guarantor(s)]
By: Name: Title:
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EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
Supplemental Indenture (this “Supplemental Indenture”), dated as of ________________, 201__, among __________________ (the “Guaranteeing Subsidiary”), a subsidiary of Ainsworth Lum-ber Co. Ltd. (or its permitted successor), a corporation existing under the federal laws of Canada (the “Company”), the Company, any Guarantors (as defined in the Indenture referred to herein), The Bank of New York Mellon, as trustee under the Indenture referred to below (the “Trustee”) and U.S. Collateral Agent and BNY Trust Company of Canada as Canadian Collateral Agent.
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee an inden-ture dated as of November 27, 2012 (the “Indenture”), providing for the issuance of 7.5% Senior Secured Notes due 2017 (the “Notes”);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guar-anteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to exe-cute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of Holders as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guar-antee and in the Indenture including but not limited to Article 10 thereof.
3. NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Note Guarantees or this Supplemental Indenture 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. The waiver may not be effective to waive liabilities under the federal securities laws.
4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
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LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
5. COUNTERPARTS. The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement. The ex-change of copies of this Indenture and of signature pages by facsimile or email (in PDF format or other-wise) transmission shall constitute effective execution and delivery of this Indenture as to the parties here-to and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or email (in PDF format or otherwise) shall be deemed to be their original signa-tures for all purposes.
6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.
8. BENEFITS ACKNOWLEDGED. The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The 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 this Guarantee are knowingly made in contemplation of such benefits.
9. SUCCESSORS. All agreements of the Guaranteeing Subsidiary in this Supple-mental Indenture shall bind its Successors, except as otherwise provided in the Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to
be duly executed and attested, all as of the date first above written.
Dated: _______________, 201___
[GUARANTEEING SUBSIDIARY]
By: Name: Title:
AINSWORTH LUMBER CO. LTD.
By: Name: Title:
[EXISTING GUARANTORS]
By: Name: Title:
THE BANK OF NEW YORK MELLON, as Trustee
By: Authorized Signatory
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EXHIBIT G
[FORM OF ABL INTERCREDITOR AGREEMENT]
[See attached].
FORM OF ABL INTERCREDITOR AGREEMENT
This ABL INTERCREDITOR AGREEMENT is dated as of [ ], and entered into by and among [ ], in its capacity as collateral agent under the ABL Revolving Loan Documents (as defined below), including its successors and assigns in such capacity from time to time (“ABL Re-volving Collateral Agent”), The Bank of New York Mellon, in its capacity as U.S. collateral agent under the Indenture and Notes Collateral Documents (each as defined below), including its successors and as-signs in such capacity from time to time (“Notes U.S. Collateral Agent”), BNY Trust Company of Cana-da, in its capacity as Canadian collateral agent under the Indenture and Notes Collateral Documents, in-cluding its successors and assigns in such capacity from time to time (“Notes Canadian Collateral Agent”) [and [ ], in its capacity as collateral agent under the First Lien Credit Facility (as defined be-low), including its successors and assigns in such capacity from time to time (“First Lien Credit Facility Agent”)].
RECITALS
Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada (the “Com-pany”), certain of the Company’s Subsidiaries from time to time party thereto as borrowers (together with the Company, the “ABL Revolving Borrowers,” and each individually a “ABL Revolving Borrower”), certain of the Company’s Subsidiaries from time to time party thereto as guarantors (such Subsidiaries, the “ABL Revolving Guarantors,” and each individually an “ABL Revolving Guarantor”), the lenders from time to time party thereto, the issuing banks party thereto from time to time, [ ], as admin-istrative agent (the “ABL Revolving Administrative Agent”) and as ABL Revolving Collateral Agent, and the other agents and arrangers party thereto, have entered into that certain Credit Agreement, dated as of [ ], providing for an ABL revolving credit facility (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ABL Revolving Credit Agreement”);
The Company (including it successors and assigns, the “Notes Issuer”), certain of the Company’s Subsidiaries from time to time party thereto as guarantors (such Subsidiaries, the “Notes Guarantors” and each individually a “Notes Guarantor), The Bank of New York Mellon, as trustee (the “Trustee”), and the Notes Collateral Agent, have entered into that certain Indenture dated as of November 27, 2012 (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which the Notes Issuer’s 7.5% Senior Secured Notes due 2017 (together with any “Additional Notes, as such term is defined in the Indenture, the “Notes”) were issued;
[The Company (the “First Lien Credit Facility Borrower”), certain of the Company’s Subsidiaries from time to time party thereto as guarantors (such Subsidiaries, the “First Lien Credit Facility Guaran-tors” and each individually a “First Lien Credit Facility Guarantor”), the lenders or investors from time to time party thereto (the “First Lien Credit Facility Lenders”), [ ], as First Lien Credit Facility Agent, and the other agents and arrangers party thereto, have entered into that certain [First Lien Credit Facility] (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “First Lien Credit Facility”), dated as of [ ].]
The ABL Revolving Obligations are to be secured (i) on a first priority basis, by Liens on the ABL Revolving Priority Collateral of the ABL Revolving Borrowers and the ABL Revolving Guarantors, and (ii) on a junior priority basis, by Liens on all other Collateral of the ABL Revolving Borrowers and the ABL Revolving Guarantors;
The Term Obligations are to be secured (i) on a first priority basis, by Liens on the Notes Priority Collateral of the Notes Issuer and the Notes Guarantors and (ii) on a second priority basis, by Liens on all other Collateral of the Notes Issuer and the Notes Guarantors;
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The ABL Revolving Loan Documents and the Term Documents provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral and certain other matters; and
The ABL Revolving Collateral Agent (on behalf of itself and the other ABL Revolving Claim-holders) and the Term Agents (on behalf of themselves and the other Term Claimholders) have agreed to the intercreditor and other provisions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. Definitions.
1.1. Defined Terms. As used in the Agreement, the following terms shall have the following meanings:
“ABL DIP Financing” has the meaning set forth in Section 6.2(a).
“ABL Revolving Administrative Agent” has the meaning set forth in the preamble to this Agree-ment.
“ABL Revolving Collateral Agent” has the meaning set forth in the preamble to this Agreement.
“ABL Revolving Borrower” and “ABL Revolving Borrowers” have the meanings set forth in the recitals to this Agreement.
“ABL Revolving Claimholders” means, at any relevant time, the holders of ABL Revolving Ob-ligations at that time, including the ABL Revolving Lenders, the ABL Revolving Issuing Banks, the ABL Revolving Collateral Agent, the ABL Revolving Administrative Agent, the ABL Revolving Treasury Services Creditors and the ABL Revolving Secured Hedging Creditors.
“ABL Revolving Collateral Documents” means the ABL Revolving Security Agreement, the Mortgages and any other agreement, document, or instrument pursuant to which a Lien is granted secur-ing (or purporting to secure) any ABL Revolving Obligation or under which rights or remedies with re-spect to such Liens are governed.
“ABL Revolving Credit Agreement” has the meaning set forth in the recitals to this Agreement.
“ABL Revolving Credit Agreement Obligations” means the [“Obligations”] as that term is de-fined in the ABL Revolving Credit Agreement (including, in each case, all amounts (including interest, fees and expenses) accruing on or after the commencement of any Insolvency Proceeding relating to any Grantor at the rate provided for in the ABL Revolving Credit Agreement that would have accrued or be-come due under the terms of the ABL Revolving Loan Documents but for the effect of the Insolvency Proceeding and irrespective of whether a claim for all or any portion of such amounts is allowable or al-lowed in such Insolvency Proceeding.
“ABL Revolving Default” means any “Event of Default,” as such term is defined in the ABL Re-volving Credit Agreement, or any event of default under any other ABL Revolving Loan Document.
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“ABL Revolving Guaranties” means the [‘Guaranty”] as such term is defined in the ABL Revolv-ing Credit Agreement, but shall also include each other guaranty made by any other guarantor in favor of the ABL Revolving Collateral Agent for the benefit of the ABL Revolving Claimholders.
“ABL Revolving Guarantor” has the meaning set forth in the recitals to this Agreement.
“ABL Revolving Issuing Banks” means the Persons from time to time that have issued Letters of Credit under the ABL Revolving Credit Agreement.
“ABL Revolving Lenders” means the “Lenders” as defined in the ABL Revolving Credit Agree-ment.
“ABL Revolving Loan Documents” means (v) the ABL Revolving Credit Agreement, (w) the ABL Revolving Collateral Documents, (x) each ABL Revolving Guaranty, (y) each ABL Revolving Treasury Services Agreement and (z) each ABL Revolving Secured Hedging Agreement.
“ABL Revolving Obligations” means, collectively, the ABL Revolving Credit Agreement Obli-gations, the Bank Product Debt and the ABL Revolving Secured Hedging Obligations.
“ABL Revolving Priority Collateral” means all of the following personal property, now owned or hereafter acquired (including, without limitation, any of the following property acquired or created after the commencement of any Insolvency Proceeding) and wherever located, consisting of the following:
(a) all Accounts and all rights to receive payments, indebtedness and other obligations (whether or not earned by performance, and whether constituting an Account, Chattel Paper (including Electronic Chattel Paper), Instrument, Document, Investment Property, General Intangible or Intangible) which arise as a result of the (i) sale, lease, license, assignment or other disposal of Inventory, Goods (other than Equipment) or merchandise, (ii) services provided or to be provided or (iii) use of a credit or charge card or information contained on or for use with such a card, including the right to payment of any interest or finance charges, together with all rights of the ABL Revolving Borrowers and ABL Revolving Guarantors, if any, in any Goods or other property giving rise to such right to payment (collectively, the “Accounts Receivable”);
(b) all Chattel Paper (including all Electronic Chattel Paper and all Tangible Chattel Paper);
(c) all Inventory;
(d) all Documents and Documents of Title for any Inventory;
(e) all tax refunds;
(f) all collection accounts, Deposit Accounts, disbursement accounts, lock-boxes, Securities Accounts, Futures Accounts and Commodity Accounts (excluding any Notes Priority Account) and any Money, cash or other assets including all cash equivalents in, or credited to, any such accounts and all Investment Property (other than, in each case, the Notes Priority Accounts and any capital stock that is otherwise included as Notes Priority Collateral);
(g) to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses, all General Intangibles (excluding intellectual property), Intangibles (excluding intellectual property), Instruments (including, without limitation, Promissory Notes), Documents, Docu-ments of Title, insurance policies (regardless of whether the Notes Collateral Agent, the ABL Revolving
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Collateral Agent or the First Lien Credit Facility Agent is the loss payee thereof), Letter-of-Credit Rights, Instruments, Commercial Tort Claims and other contracts and Supporting Obligations;
(h) all books and Records related to the foregoing (including, without limitation, customer lists, files, correspondence, tapes, computer programs, printouts and computer records);
(i) all collateral, guarantees, letters of credit and other credit enhancement given by any oth-er Person in support of any of the ABL Revolving Priority Collateral;
(j) all contractual claims and causes of action to the extent relating to any of the ABL Re-volving Priority Collateral; and
(k) all products, Proceeds, accessions, rents, profits and Supporting Obligations of any and all of the foregoing in whatever form received, including proceeds of insurance policies related to Inven-tory and accounts of any Grantor and business interruption insurance.
As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York or the Ontario PPSA, as applicable from time to time: “Accounts,” “Chattel Paper,” “Commodity Account,” “Commercial Tort Claims,” “Deposit Account,” “Document,” “Document of Ti-tle,” “Electronic Chattel Paper,” “Futures Account,” “General Intangible” (except that such term shall include, without limitation, all interest rate or currency protection or hedging arrangements, all licenses, permits, concessions and authorizations and all intellectual property (in each case, regardless of whether characterized as general intangibles or intangibles under the UCC or the Ontario PPSA, as applicable)), “Intangible,” “Goods” (except that such term shall include, without limitation, all Equipment and Invento-ry (in each case, regardless of whether characterized as goods under the UCC or the Ontario PPSA, as applicable)), “Instrument,” “Investment Property,” “Inventory” (except that such term shall include, with-out limitation, (1) all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in progress, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory or otherwise used or consumed in the business of any ABL Revolving Borrower or ABL Revolving Guarantor, (2) all goods in which any ABL Revolving Borrower or ABL Revolving Guarantor has an in-terest in mass or a joint or other interest or right of any kind, (3) all goods which are returned to or repos-sessed by any ABL Revolving Borrower or ABL Revolving Guarantor, (4) all computer programs em-bedded in any goods and (5) all accessions of the foregoing (in each case, regardless of whether character-ized as inventory under the UCC or the Ontario PPSA, as applicable)), “Letter-of-Credit Right,” “Mon-ey,” “Payment Intangibles,” “Proceeds,” “Promissory Notes,” “Records,” “Securities Accounts,” “Sup-porting Obligation” and “Tangible Chattel Paper.”
“ABL Revolving Secured Hedging Agreement” means the [“Secured Hedging Agreements”] as such term is defined in the ABL Revolving Security Agreement.
“ABL Revolving Secured Hedging Creditors” means the [“Secured Hedging Creditors”] as such term is defined in the ABL Revolving Security Agreement.
“ABL Revolving Secured Hedging Obligations” means the [“Secured Hedging Obligations”] as such term is defined in the ABL Revolving Security Agreement.
“ABL Revolving Security Agreement” means the [Security Agreement] dated [ ] by and among the Grantors and the ABL Revolving Collateral Agent.
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“ABL Revolving Treasury Services Agreement” means the [“Treasury Services Agreement”] as such term is defined in the ABL Revolving Credit Agreement.
“ABL Revolving Treasury Services Creditors” means the [“Treasury Services Creditors”] as such term is defined in the ABL Revolving Credit Agreement.
“Agents” means the Notes U.S. Collateral Agent, the Notes Canadian Collateral Agent, the ABL Collateral Agent and the First Lien Credit Facility Agent.
“Agreement” means this ABL Intercreditor Agreement.
“Applicable Term Agent” shall mean the First Lien Credit Facility Agent so long as any First Lien Obligations are outstanding, and the Notes Collateral Agent at all other times.
“Bank Product Debt” means all obligations pursuant to ABL Revolving Treasury Services Agreements and any other banking services provided to the Company and its Subsidiaries including in connection with credit cards, purchasing cards and stored value cards and treasury management services, cash management, controlled disbursement, automated clearinghouse transactions, return items, over-drafts and depository network services or similar transactions.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.
“Bankruptcy Law” means the Bankruptcy Code, the BIA, the CCAA, or any other federal, state, provincial or foreign law relating to bankruptcy, judicial management, insolvency, winding-up, dissolu-tion, litigation, receivership, reorganization, administration or relief of debtors, in each case as now or hereafter in effect, or any successor statute.
“BIA” means the Bankruptcy and Insolvency Act (Canada) as now and hereafter in effect, or any successor statute.
“Business Day” means any day except Saturday, Sunday and any day which shall be in New York, New York, a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close.
“Canadian Insolvency Proceeding” means (a) any case, action or proceeding before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, interim re-ceivership, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors or other similar arrangement in re-spect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under Canadian federal, provincial or territorial law, including any proceeding un-der the BIA or the CCAA and any proceeding under applicable corporate law seeking a compromise or arrangement of any debts of the corporation, or a stay of proceedings to enforce any of the claims of the corporation’s creditors against it.
“Cash Collateral” has the meaning set forth in Section 6.2(a).
“CCAA” means the Companies’ Creditors Arrangement Act (Canada) as now and hereafter in ef-fect, or any successor statute.
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“Claimholders” means, with respect to the ABL Revolving Obligations, all ABL Revolving Claimholders, and with respect to the Term Obligations, all Term Claimholders.
“Collateral” means all of the assets and property of the Company and its Subsidiaries (other than Excluded Assets), whether real, personal or mixed, with respect to which a Lien is granted as security for any ABL Revolving Obligations or any Term Obligations.
“Collateral Account” has the meaning given to such term in the Indenture and/or the First Lien Credit Facility Documents.
“Company” has the meaning set forth in the recitals to this Agreement.
“Credit Facilities” means, one or more debt facilities or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables fi-nancing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise and including issuances of debt securities evidenced by notes, debentures, bond or similar instruments) or re-financed in whole or in part from time to time.
“Default Disposition” means, any private or public Disposition of (i) all or any material portion of the ABL Revolving Priority Collateral by one or more Grantors with the consent of the ABL Revolving Collateral Agent after the occurrence and during the continuance of an ABL Revolving Default (and prior to the Discharge of ABL Revolving Obligations) or (ii) all or any material portion of the Notes Priority Collateral by one or more Grantors with the consent of the Term Agents after the occurrence and during the continuance of a Term Default (and prior to the Discharge of Term Obligations), in connection with good faith efforts by the ABL Revolving Collateral Agent or any Term Agent, as the case may be, to col-lect the ABL Revolving Obligations through the Disposition of ABL Revolving Priority Collateral or the Term Obligations through the Disposition of Notes Priority Collateral.
“Discharge of First Lien Obligations” means, except to the extent otherwise expressly provided in Section 5.5(a):
(a) the full cash payment of the First Lien Obligations, including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respec-tive documentation (whether or not allowed as a claim during such Insolvency Proceeding) (other than Bank Product Debt and First Lien Credit Facility Secured Hedging Obligations to the extent not due and payable, undrawn amounts in respect of outstanding Letters of Credit and contingent indemnification obligations except as provided in clause (f) below);
(b) the termination or expiration of all commitments, if any, to extend credit that would constitute First Lien Obligations;
(c) the termination or cash collateralization (in an amount and in the manner required by the First Lien Credit Facility or otherwise on terms and conditions reasonably satisfactory to the First Lien Credit Facility Agent and the applicable First Lien Credit Facility Issuing Banks) of all outstanding Letters of Credit and inchoate or contingent First Lien Obligations (or delivery of a standby letter of credit acceptable to (and issued by a financial institution reasonably acceptable to) the First Lien Credit Facility Agent and the applicable First Lien Credit Facility Issuing Banks in their discretion, in the amount of required cash collateral);
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(d) the full cash payment of the First Lien Bank Product Debt, to the extent due and payable, including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim in any such Insolvency Proceeding), and the termination or expiration of all commitments, if any, in re-spect of the First Lien Bank Product Debt;
(e) the full cash payment of the First Lien Obligations, to the extent due and payable, including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim in any such Insolvency Proceeding) and the termination of all First Lien Credit Facility Secured Hedging Agreements or, at the option of the First Lien Credit Facility Secured Hedging Creditors, cash collateralization in an amount and pursuant to arrangements satisfactory to the First Lien Credit Facility Secured Hedging Creditors; and
(f) the cash collateralization (or letter of credit support) for any contingent indemni-fication obligations not yet due and payable, but for which a claim has been asserted in writing under any First Lien Credit Facility Documents, in each case on terms and conditions acceptable to the applicable First Lien Credit Facility Claimholders.
“Discharge of Notes Obligations” means the full cash payment of the Notes Obligations (other than inchoate or contingent Notes Obligations for which a claim has not yet been asserted in writing un-der any Notes Documents), including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim during such Insolvency Proceeding).
“Discharge of ABL Revolving Obligations” means, except to the extent otherwise expressly pro-vided in Section 5.5(a):
(a) the full cash payment of the ABL Revolving Credit Agreement Obligations, in-cluding any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim during such In-solvency Proceeding) (other than Bank Product Debt and ABL Revolving Secured Hedging Obli-gations to the extent not due and payable, undrawn amounts in respect of outstanding Letters of Credit and contingent indemnification obligations except as provided in clause (f) below);
(b) the termination or expiration of all commitments, if any, to extend credit that would constitute ABL Revolving Credit Agreement Obligations;
(c) the termination or cash collateralization (in an amount and in the manner required by the ABL Revolving Credit Agreement or otherwise on terms and conditions reasonably satis-factory to the ABL Revolving Administrative Agent and the applicable ABL Revolving Issuing Banks) of all outstanding Letters of Credit and inchoate or contingent ABL Revolving Credit Agreement Obligations (or delivery of a standby letter of credit acceptable to (and issued by a fi-nancial institution reasonably acceptable to) the ABL Revolving Administrative Agent and the applicable ABL Revolving Issuing Banks in their discretion, in the amount of required cash col-lateral);
(d) the full cash payment of the Bank Product Debt, to the extent due and payable, including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim in any such
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Insolvency Proceeding), and the termination or expiration of all commitments, if any, in respect of Bank Product Debt;
(e) the full cash payment of the ABL Revolving Secured Hedging Obligations, to the extent due and payable, including any interest, fees and other charges accruing during an Insol-vency Proceeding at the rate provided for in the respective documentation (whether or not al-lowed as a claim in any such Insolvency Proceeding) and the termination of all ABL Revolving Secured Hedging Agreements or, at the option of the ABL Revolving Secured Hedging Creditors, cash collateralization in an amount and pursuant to arrangements satisfactory to the ABL Revolv-ing Secured Hedging Creditors; and
(f) the cash collateralization (or letter of credit support) for any contingent indemni-fication obligations not yet due and payable, but for which a claim has been asserted in writing under any ABL Revolving Loan Documents, in each case on terms and conditions acceptable to the applicable ABL Revolving Claimholders.
“Discharge of Term Obligations” means, the Discharge of Notes Obligations and the Discharge of First Lien Obligations.
“Disposition” or “Dispose” means the sale, assignment, transfer, license, lease (as lessor), ex-change, or other disposition (including any sale and leaseback transaction) of any property by any person (or the granting of any option or other right to do any of the foregoing).
“Enforcement Notice” means a written notice delivered by either the ABL Revolving Collateral Agent or any Term Agent to the other Agents stating that an event of default has occurred and is continu-ing under the ABL Revolving Loan Agreement, the First Lien Credit Facility or the Indenture, as applica-ble, and that an Enforcement Period has commenced with respect to the ABL Revolving Priority Collat-eral or the Notes Priority Collateral, as applicable.
“Enforcement Period” means the period of time following the receipt by either the ABL Revolv-ing Collateral Agent or any Term Agent of an Enforcement Notice from the other Agent and continuing until the earliest of (a) in case of an Enforcement Period commenced by the Notes Collateral Agent, the Discharge of Notes Obligations, (b) in the case of an Enforcement Period commenced by the ABL Re-volving Collateral Agent, the Discharge of ABL Revolving Obligations, (c) in the case of an Enforcement Period commenced by the First Lien Credit Facility Agent, the Discharge of First Lien Obligations or (d) the date on which the ABL Revolving Collateral Agent or any Term Agent (as applicable) terminate, or agree in writing to terminate, the Enforcement Period initiated by such Person.
“Excluded Assets” has the meaning set forth in the Notes Security Agreements.
“Exercise any Secured Creditor Remedies” or “Exercise of Secured Creditor Remedies” means (a) the taking of any action to enforce any Lien in respect of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, the Collateral, including the institution of any judicial or nonjudicial foreclo-sure proceedings or having or seeking to have a trustee, receiver, liquidator, monitor or similar official appointed for or over the Collateral or taking any action to take possession of the Collateral, the giving of notice of any public or private sale or other Disposition pursuant to the PPSA, Article 8 or Article 9 of the UCC or other applicable law or any diligently pursued in good faith attempt to vacate or obtain relief from a stay or other injunction restricting any other action described in this definition, (b) the exercise of any right or remedy provided to a secured creditor under the ABL Revolving Loan Documents or the Term Documents (including, in either case, any delivery of any notice to otherwise seek to obtain pay-
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ment directly from any account debtor of any Grantor or the taking of any action or the exercise of any right or remedy in respect of the set off or recoupment against the Collateral or proceeds of Collateral), under applicable law, at equity, in an Insolvency Proceeding or otherwise, including credit bidding or oth-erwise the acceptance of Collateral in full or partial satisfaction of a Lien, (c) the sale, assignment, trans-fer, lease, license, or other Disposition of all or any portion of the Collateral, by private or public sale or any other means, (d) the solicitation of bids from third parties to conduct the liquidation of all or a materi-al portion of Collateral to the extent undertaken and being diligently pursued in good faith to consummate the Disposition of such Collateral within a commercially reasonable time, (e) the engagement or retention of sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers, or other third parties for the purposes of valuing, marketing, or Disposing of, all or a material portion of the Collateral to the extent undertaken and being diligently pursued in good faith to consummate the Disposition of such Collateral within a commercially reasonable time, (f) the exercise of any other enforcement right relating to the Collateral (including the exercise of any voting rights relating to any capital stock composing a por-tion of the Collateral or seeking relief from the automatic stay) whether under the ABL Revolving Loan Documents, the Term Documents, under applicable law of any jurisdiction, in equity, in an Insolvency Proceeding, or otherwise, or (g) the pursuit of Default Dispositions relative to all or a material portion of the Collateral; provided that any of the following actions shall not in any case constitute Exercise any Se-cured Creditor Remedies or Exercise of Secured Creditor Remedies: (i) the establishment of borrowing base reserves, collateral ineligibles, or other conditions for advances, (ii) the changing of advance rates or advance sublimits, (iii) the imposition of a default rate or late fee, (iv) the collection and application of accounts or other monies deposited from time to time in deposit accounts or securities accounts, in each case, to the extent constituting ABL Revolving Priority Collateral, against the ABL Revolving Obliga-tions pursuant to the provisions of the ABL Revolving Loan Documents (including, without limitation, the notification of account debtors, depositary institutions or any other Person to deliver proceeds of Col-lateral to ABL Revolving Collateral Agent), (v) the cessation of lending pursuant to the provisions of the ABL Revolving Loan Documents, including upon the occurrence of a default on the existence of an over-advance, (vi) the filing of a proof of claim in any Insolvency Proceeding, (vii) the consent by ABL Re-volving Collateral Agent to Disposition by any Grantor of any of the ABL Revolving Priority Collateral (other than in connection with liquidation of the ABL Revolving Priority Collateral at the request of ABL Revolving Collateral Agent), (viii) the consent by any Term Agent, in accordance with the Term Docu-ments, to Disposition by any Grantor of any of the Notes Priority Collateral (other than in connection with liquidation of the Notes Priority Collateral at the request of such Term Agent), (ix) exercise of cash dominion by the ABL Revolving Collateral Agent in respect of the ABL Revolving Priority Collateral over the Deposit Accounts of any Grantor and application of funds in connection therewith and (x) the acceleration of the Term Obligations or the ABL Revolving Obligations.
“First Lien Bank Product Debt” means [“Bank Product Debt”] as such term is defined in the First
Lien Credit Facility.
“First Lien Credit Facility” means any Credit Facility of the Company and/or any of the Guaran-tors (other than the ABL Revolving Credit Agreement) so long as (i) the Indebtedness outstanding under such Credit Facility is secured by a Permitted Lien described under clause (1)(y) of the definition thereof in the Indenture, and (ii) the First Lien Credit Facility Agent with respect to such Credit Facility is a party hereto or becomes a party hereto by execution of a First Lien Credit Facility Joinder.
“First Lien Credit Facility Agent” means the agent, trustee or other authorized representative ap-pointed under any First Lien Credit Facility, or any successor thereto in such capacity.
“First Lien Credit Facility Claimholders” means, at any relevant time, the holders of First Lien Obligations.
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“First Lien Credit Facility Collateral Documents” means the [“Collateral Documents”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Default” means any “Event of Default,” as such term is defined in the First Lien Credit Facility, or any event of default under any other First Lien Credit Facility Documents.
“First Lien Credit Facility Documents” means (v) the First Lien Credit Facility, (w) the First Lien Credit Facility Collateral Documents, (x) each First Lien Credit Facility Guaranty, (y) each First Lien Credit Facility Treasury Services Agreement and (z) each First Lien Credit Facility Secured Hedging Agreement.
“First Lien Credit Facility Guaranty” means the [“Guaranty”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Issuing Banks” means the [“Issuing Banks”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Joinder” shall mean a joinder agreement in the form of Exhibit A here-to.
“First Lien Credit Facility Secured Hedging Agreement” means the [“Secured Hedging Agree-ments”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Secured Hedging Creditors” means the [“Secured Hedging Creditors] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Treasury Services Agreement” means the [Treasury Services Agree-ment”] as such term is defined in the First Lien Credit Facility
“First Lien Obligations” means all obligations, indebtedness, liabilities and other amounts owing, due, or secured under the terms of the First Lien Credit Facility or any other First Lien Credit Facility Document, whether now existing or arising hereafter, including all principal, premium, interest, fees, at-torneys fees and expenses, costs, charges, expenses, reimbursement obligations, indemnities, guarantees, and all other amounts payable under or secured by any First Lien Credit Facility Document (including, in each case, all amounts (including interest, fees and expenses) accruing on or after the commencement of any Insolvency Proceeding at the rate provided in the First Lien Credit Facility or any other First Lien Credit Facility Documents, as applicable, whether or not a claim for all or any portion of such amount is allowable or is allowed in any such Insolvency Proceeding.
“Governmental Authority” means the government of the United States of America, Canada or any other nation, any political subdivision thereof, whether state, provincial, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising execu-tive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to gov-ernment.
“Grantors” means the ABL Revolving Borrowers, the ABL Revolving Guarantors, the Notes Is-suer, the Notes Guarantors, the First Lien Credit Facility Borrower, the First Lien Credit Facility Guaran-tors and each other Person that may from time to time execute and deliver an ABL Revolving Collateral Document or a Term Collateral Document as a “debtor,” “grantor,” or “pledgor” (or the equivalent there-of).
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“Indenture” has the meaning set forth in the recitals to this Agreement.
“Insolvency Proceeding” means:
(a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Grantor including any Canadian Insolvency Proceeding;
(b) any other voluntary or involuntary insolvency or bankruptcy case or proceeding, or any receivership, liquidation or other similar case or proceeding with respect to any Grantor or with respect to a material portion of its assets;
(c) any liquidation, dissolution, or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or
(d) any assignment for the benefit of creditors or any other marshaling of assets for creditors of any Grantor or other similar arrangement in respect of such Grantor’s creditors gen-erally.
“IP Use Period” has the meaning set forth in Section 3.9(h).
“Letters of Credit” means the “Letters of Credit,” as that term is defined in the ABL Revolving Credit Agreement or First Lien Credit Facility, as applicable.
“Lien” means any lien, mortgage, pledge, assignment, security interest, hypothec, charge, or en-cumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust, or other prefer-ential arrangement having the practical effect of any of the foregoing.
“Mortgage” means each mortgage, deed of trust, deed of hypothec or deed to secure debt pursu-ant to which a Grantor grants to (a) the ABL Revolving Collateral Agent, for the benefit of the ABL Re-volving Claimholders, Liens upon the real estate Collateral owned or leased by such Grantor, as security for the ABL Revolving Obligations or (b) a Term Agent, for the benefit of the applicable Term Claim-holders, Liens upon the real estate Collateral owned or leased by such Grantor, as security for the appli-cable Term Obligations.
“Notes” has the meaning set forth in the recitals to this Agreement.
“Notes Claimholders” means Holders (as such term is defined in the Indenture) from time to time of Notes, the Trustee and the Notes Collateral Agent, each Pari Passu Lien Agent and each holder of Pari Passu Lien Indebtedness.
“Notes Canadian Collateral Agent” has the meaning set forth in the preamble to this Agreement.
“Notes Collateral Agent” means the Notes U.S. Collateral Agent and/or the Notes Canadian Col-lateral Agent, as the context may require.
“Notes U.S. Collateral Agent” has the meaning set forth in the preamble to this Agreement.
“Notes Collateral Documents” means the Notes Security Agreements, the Mortgages and any other agreement pursuant to which a Lien is granted securing (or purporting to secure) any Notes Obliga-tions or under which rights or remedies with respect to such Liens are governed.
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“Notes Default” means any “Event of Default,” as such term is defined in the Notes Security Agreements, or any event of default under any other Notes Document.
“Notes Documents” means the Indenture, the Notes, the Notes Collateral Documents and each Pari Passu Lien Agreement (as defined in the Notes Security Agreements).
“Notes Guarantor” has the meaning set forth in the recitals to this Agreement.
“Notes Issuer” has the meaning set forth in the recitals to this Agreement.
“Notes Obligations” means all obligations, indebtedness, liabilities and other amounts owing, due, or secured under the terms of the Indenture or any other Notes Document (including, without limita-tion, the Pari Passu Lien Indebtedness), whether now existing or arising hereafter, including all principal, premium, interest, fees, attorneys fees and expenses, costs, charges, expenses, reimbursement obligations, indemnities, guarantees, and all other amounts payable under or secured by any Notes Document (includ-ing, in each case, all amounts (including interest, fees and expenses) accruing on or after the commence-ment of any Insolvency Proceeding at the rate provided in the Notes Indenture relating to the Notes Issuer or any other Notes Documents, as applicable, whether or not a claim for all or any portion of such amount is allowable or allowed in any such Insolvency Proceeding, provided that any Pari Passu Lien Indebted-ness shall constitute “Notes Obligations” hereunder only to the extent it constitutes “Secured Obligations” (as such term is defined in the Notes Security Agreements).
“Notes Priority Accounts” means any Collateral Accounts that are designated solely to contain identifiable proceeds of the Notes Priority Collateral (it being understood that any property in such De-posit Accounts which is not identifiable proceeds of Notes Priority Collateral shall not be Notes Priority Collateral solely by virtue of being on deposit in any such Collateral Account).
“Notes Priority Collateral” means all Collateral, other than ABL Revolving Priority Collateral, now owned or hereafter acquired (including, without limitation, any of the following property acquired or created after the commencement of any Insolvency Proceeding) to the extent securing Notes Obligations pursuant to the Notes Collateral Documents, including, for the avoidance of doubt, the following (except to the extent constituting ABL Revolving Priority Collateral):
(a) all Equipment, Fixtures, intellectual property and Investment Property, including the capital stock or other equity interests held by the Company or any Grantor that is a Subsidiary of the Company,
(b) any fee owned real property owned with a fair market value in excess of $5 mil-lion,
(c) all Instruments, Documents, Intangibles and General Intangibles,
(d) all Commercial Tort Claims, and
(e) all collateral security and guarantees with respect to the foregoing, and, subject to Section 3.11 and the proviso to Section 4.2, all cash, Money, insurance proceeds, Instruments, Securities, Financial Assets and Deposit Accounts received as Proceeds of any Notes Priority Collateral;
“Notes Security Agreements” means a U.S. law governed security agreement and Canadian law governed security agreements, each dated November 27, 2012, (as amended, restated, amended and re-
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stated, supplemented or otherwise modified from time to time) by and among the Notes Issuer, as appli-cable, the Notes Guarantors party thereto, as applicable, and the Notes U.S. Collateral Agent or the Notes Canadian Collateral Agent, as applicable.
“Obligations” means, as applicable, (a) all ABL Revolving Obligations and (b) all Term Obliga-tions.
“Ontario PPSA” means the Personal Property Security Act (Ontario) as now and hereafter in ef-fect, or any successor statute.
“Pari Passu Lien Agent” has the meaning set forth in the Notes Security Agreements.
“Pari Passu Lien Indebtedness” has the meaning set forth in the Indenture.
“Pari Passu Lien Indebtedness Joinder” shall mean a joinder agreement in the form of Exhibit B hereto.
“Person” means any natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority, or other entity.
“Pledged Collateral” has the meaning set forth in Section 5.4(a).
“PPSA” shall mean the Personal Property Security Act (Ontario) and to the extent applicable based on the location of the personal property or debtor and the application of applicable conflicts rules, any other applicable federal, provincial or territorial statute pertaining to the granting, perfecting, priority or ranking of security interests, liens or hypothecs on personal property (including the Civil Code (Que-bec)), and any successor statutes, together with any regulations thereunder, in each case as in effect from time to time.
“Priority Collateral” with respect to the ABL Revolving Claimholders, all ABL Revolving Priori-ty Collateral, and with respect to the Term Claimholders, all Notes Priority Collateral.
“Recovery” has the meaning set forth in Section 6.7.
“Refinance” means, in respect of any indebtedness, to refinance, extend, renew, defease, supple-ment, restructure, replace, refund or repay, or to issue other indebtedness in exchange or replacement for such indebtedness, in whole or in part, whether with the same or different lenders, investors, arrangers and/or agents. “Refinanced” and “Refinancing” shall have correlative meanings.
“Subsidiary” of a person means a corporation, partnership, limited liability company, or other en-tity in which that person directly or indirectly owns or controls at least 50% of the shares of capital stock having ordinary voting power to vote in the election of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.
“Term Agent” means, collectively, the Notes Collateral Agent and the First Lien Credit Facility Agent, if any.
“Term Collateral Documents” means, collectively, the Notes Collateral Documents and the First Lien Credit Facility Collateral Documents.
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“Term Claimholders” means, collectively, the Notes Claimholders and the First Lien Credit Facil-ity Claimholders, if any.
“Term Default” means any Notes Default and any First Lien Credit Facility Default, as applica-ble.
“Term DIP Financing” has the meaning set forth in Section 6.2(b).
“Term Documents” means, collectively, the Notes Documents and the First Lien Credit Facility Documents, if any.
“Term Intercreditor Agreement” has the meaning set forth in Section 9.14.
“Term Obligations” means, collectively, the Notes Obligations and the First Lien Obligations, if any.
“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in ef-fect in any applicable jurisdiction.
“Use Period” means the period commencing on the date that the ABL Revolving Collateral Agent (or any ABL Revolving Claimholder acting with the consent of the ABL Revolving Collateral Agent) commences the Exercise of Secured Creditor Remedies in connection with any ABL Revolving Priority Collateral in a manner as provided in Section 3.9 (having theretofore furnished each Term Agent with an Enforcement Notice) and ending on the earlier to occur of (i) 180 days thereafter and (ii) the Discharge of ABL Revolving Obligations. If any stay or other order that prohibits any of the ABL Revolving Collat-eral Agent or the other ABL Revolving Claimholders from commencing and continuing to Exercise Any Secured Creditor Remedies or to liquidate and sell the ABL Revolving Priority Collateral has occurred by operation of law or has been entered by a court of competent jurisdiction, such 180-day period shall be tolled during the pendency of any such stay or other order and the Use Period shall be so extended and upon lifting of the stay or other order, if there are fewer than 120 days remaining in such 180-day period, then such 180-day period shall be extended so that the ABL Revolving Collateral Agent and the ABL Re-volving Claimholders have 120 days upon lifting of the stay or other order.
1.2. Construction. The definitions of terms in this Agreement shall apply equally to the sin-gular and plural forms of the terms defined. Whenever the context may require, any pronoun shall in-clude 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.” The term “or” shall be construed to have, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” Un-less the context requires otherwise:
(a) except as otherwise provided herein, any definition of or reference to any agree-ment, instrument, or other document herein shall be construed as referring to such agreement, in-strument, or other document as from time to time amended, restated, supplemented, modified, re-newed, extended, Refinanced, refunded, or replaced;
(b) any reference to any agreement, instrument, or other document herein “as in ef-fect on the date hereof” shall be construed as referring to such agreement, instrument, or other document without giving effect to any amendment, restatement, supplement, modification, or Re-finance after the date hereof;
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(c) any definition of or reference to the ABL Revolving Obligations or the Term Ob-ligations herein shall be construed as referring to the ABL Revolving Obligations or the Term Obligations (as applicable) as from time to time amended, restated, supplemented, modified, re-newed, extended, Refinanced, refunded, or replaced;
(d) any reference herein to any Person shall be construed to include such Person’s successors and assigns;
(e) 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;
(f) all references herein to Sections shall be construed to refer to Sections of this Agreement; and
(g) 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.
SECTION 2. Lien Priorities.
2.1. Relative Priorities. Notwithstanding the date, time, method, manner, or order of grant, at-tachment, or perfection of any Liens securing (or purportedly securing) the ABL Revolving Obligations with respect to the Collateral or of any Liens securing (or purportedly securing) the Term Obligations with respect to the Collateral (including, in each case, irrespective of whether any such Lien is granted (or secures Obligations relating to the period) before or after the commencement of any Insolvency Proceed-ing) and notwithstanding any contrary provision of the UCC, the PPSA or any other applicable law or the ABL Revolving Loan Documents or the Term Documents, as applicable, or any defect or deficiencies in, or failure to attach or perfect, the Liens securing (or purportedly securing) any of the Obligations, or any other circumstance whatsoever:
(a) any Lien with respect to the ABL Revolving Priority Collateral securing any ABL Revolving Obligations now or hereafter held by or on behalf of, or created for the benefit of, the ABL Revolving Collateral Agent or any ABL Revolving Claimholders or any agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, opera-tion of law, subrogation or otherwise, shall, until the Discharge of ABL Revolving Obligations has occurred, be senior in all respects and prior to any Lien with respect to the ABL Revolving Priority Collateral securing any Term Obligations;
(b) any Lien with respect to the Notes Priority Collateral securing any Term Obliga-tions now or hereafter held by or on behalf of, or created for the benefit of, each Term Agent or any Term Claimholders or any agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall, until the Discharge of Term Obligations has occurred, be senior in all respects and prior to any Lien with respect to the Notes Priority Collateral securing any ABL Revolving Obligations;
(c) any Lien with respect to the ABL Revolving Priority Collateral securing any Term Obligations now or hereafter held by or on behalf of, or created for the benefit of, each Term Agent, any Term Claimholders or any agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens with respect to the ABL Revolving Priority Collateral securing any ABL Revolving Obligations; and
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(d) any Lien with respect to the Notes Priority Collateral securing any ABL Revolv-ing Obligations now or hereafter held by or on behalf of, or created for the benefit of, the ABL Revolving Collateral Agent, any ABL Revolving Claimholders or any agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, operation of law, sub-rogation or otherwise, shall be junior and subordinate in all respects to all Liens with respect to the Notes Priority Collateral securing any Term Obligations.
The subordination of Liens provided for in this Agreement shall continue to be effective with re-spect to any part of the Collateral from and after the date hereof whether such Liens are declared, or ruled to be, invalid, unenforceable, void or not allowed by a court of competent jurisdiction or otherwise, and whether as a result of any action taken by any Term Agent or the ABL Revolving Collateral Agent, as applicable, or any failure by such Person to take any action with respect to any financing statement (in-cluding any amendment to or continuation thereof), mortgage or other perfection document, or otherwise. Notwithstanding anything in this Section 2.1 to the contrary, no Term Agent or ABL Revolving Collateral Agent shall have any obligation to ensure or enforce the priority of liens described herein.
2.2. Prohibition on Contesting Liens or Obligations. Each of the Term Agents, for themselves and on behalf of any applicable Term Claimholder, and the ABL Revolving Collateral Agent, for itself and on behalf of each ABL Revolving Claimholder, agrees that it will not (and hereby waives any right to), directly or indirectly, contest, or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding): (a) the priority, validity, attachment, perfection or enforceability of a Lien in the Collateral held by or on behalf of the ABL Revolving Collateral Agent or any other ABL Revolving Claimholders or by or on behalf of each Term Agent or any other Term Claimholders, as the case may be; or (b) the priority, validity or enforceability of any Obligations, including the allowability or priority of any Obligations in any Insolvency Proceeding; provided, however that nothing in this Agreement shall be construed to prevent or impair the rights of the ABL Revolving Collateral Agent, any ABL Revolving Claimholder, each Term Agent or any Term Claimholder to enforce the terms of this Agreement, includ-ing the provisions of this Agreement relating to the priority of the Liens securing the ABL Revolving Ob-ligations and the Term Obligations, as applicable, as provided in Section 3.
2.3. New Liens. During the term of this Agreement, whether or not any Insolvency Proceed-ing has been commenced by or against any Grantor, the parties hereto agree, subject to Section 6, that no Grantor shall:
(a) grant or suffer to exist any Liens on any asset to secure any Term Obligation un-less such Grantor also offers to grant, and, at the option of ABL Revolving Collateral Agent, grants, a Lien on such asset to secure the ABL Revolving Obligations concurrently with the grant of a Lien thereon in favor of the Term Agents in accordance with the priorities set forth in this Agreement and the ABL Revolving Collateral Documents and the Term Collateral Documents; or
(b) grant or suffer to exist any Liens on any asset to secure any ABL Revolving Ob-ligations unless such Grantor grants a Lien on such asset to secure the Term Obligations concur-rently with the grant of a Lien thereon in favor of ABL Revolving Collateral Agent in accordance with the priorities set forth in this Agreement and the ABL Revolving Collateral Documents and the Term Collateral Documents.
2.4. Cooperation in Designating Collateral and Additional Filings. (a) In furtherance of Sec-tion 9.8, the parties hereto agree to cooperate in good faith from time to time in order to determine the specific items included in the ABL Revolving Priority Collateral and the Notes Priority Collateral and the steps taken or to be taken to perfect their respective Liens thereon and the identity of the respective parties
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obligated under the ABL Revolving Loan Documents and the Term Documents provided that no Term Agent shall have any obligation to determine such steps taken or to be taken.
(b) At the reasonable request and expense of the ABL Revolving Borrower or First Lien Credit Facility Borrower, as applicable, in connection with the entering of a First Lien Credit Facility or the ABL Revolving Credit Agreement, or the Refinancing of any ABL Revolving Obligations or Term Obli-gations, each Term Claimholder or ABL Claimholder, or Term Agent or ABL Revolving Collateral Agent, as applicable shall execute any filings under the UCC, PPSA, title registry or in in any other public offices to give effect to the priorities set forth in this Agreement; provided that the Term Agent shall have no obligation to execute any such filing, unless the applicable Grantor has provided an officer’s certificate attaching such filing and certifying that such filing shall not affect perfection of the applicable Term Claimholders’ security interests and Liens in the Collateral and that such filing shall solely give effect to the priorities set forth in this Agreement.
SECTION 3. Exercise of Remedies.
3.1. Exercise of Remedies by the Term Agents. Subject to Section 3.4, until the Discharge of ABL Revolving Obligations has occurred, whether or not any Insolvency Proceeding has been com-menced by or against any Grantor, the Term Agents and the Term Claimholders:
(a) will not exercise or seek to exercise any rights or remedies with respect to any ABL Revolving Priority Collateral (including any Exercise of Secured Creditor Remedies with respect to any ABL Revolving Priority Collateral);
(b) subject to Section 3.4 and Section 3.8, will not directly or indirectly contest, pro-test, or object to or hinder any Exercise of Secured Creditor Remedies by the ABL Revolving Collateral Agent or with the consent of the ABL Revolving Credit Agent any ABL Revolving Claimholder with respect to any ABL Revolving Priority Collateral and have no right to direct the ABL Revolving Collateral Agent to Exercise any Secured Creditor Remedies with respect to any ABL Revolving Priority Collateral or take any other action under the ABL Revolving Loan Doc-uments with respect to any ABL Revolving Priority Collateral;
(c) commence any judicial or nonjudicial foreclosure and/or enforcement proceed-ings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, the ABL Revolving Priori-ty Collateral; and
(d) will not object to (and waive any and all claims with respect to) the forbearance by the ABL Revolving Collateral Agent or the ABL Revolving Claimholders from exercising any rights or remedies with respect to any ABL Revolving Priority Collateral (including any Exercise of Secured Creditor Remedies with respect to any ABL Revolving Priority Collateral).
3.2. Exercise of Remedies by ABL Revolving Collateral Agent. Subject to Section 3.4, until the Discharge of Term Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, the ABL Revolving Collateral Agent and the ABL Revolving Claimholders:
(a) will not exercise or seek to exercise any rights or remedies with respect to any Notes Priority Collateral (including any Exercise of Secured Creditor Remedies with respect to any Notes Priority Collateral);
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(b) subject to Section 3.4 and Section 3.8, will not directly or indirectly contest, pro-test, or object to or hinder any Exercise of Secured Creditor Remedies by any Term Agent or with the Consent of the Notes Collateral Agent any Term Claimholder with respect to any Notes Prior-ity Collateral and has no right to direct any Term Agent to Exercise any Secured Creditor Reme-dies with respect to any Notes Priority Collateral or take any other action under the Term Docu-ments with respect to any Notes Priority Collateral;
(c) commence any judicial or nonjudicial foreclosure and/or enforcement proceed-ings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, the Notes Priority Collat-eral; and
(d) will not object to (and waives any and all claims with respect to) the forbearance by any Term Agent or any Term Claimholder from exercising any rights and remedies with re-spect to any Notes Priority Collateral (including any Exercise of Secured Creditor Remedies with respect to any Notes Priority Collateral).
3.3. Exclusive Enforcement Rights. (a) Subject to Section 3.4, until the Discharge of ABL Revolving Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, the ABL Revolving Collateral Agent shall have the exclusive right to Exercise any Secured Creditor Remedies with respect to the ABL Revolving Priority Collateral without any con-sultation with or the consent of each Term Agent or any Term Claimholder and (b) until the Discharge of Term Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, each Term Agent shall have the exclusive right to Exercise any Secured Creditor Remedies with respect to the Notes Priority Collateral without any consultation with or the consent of the ABL Revolving Collateral Agent or any ABL Revolving Claimholder. In connection with any Exercise of Secured Creditor Remedies, each of the Term Agents and the ABL Revolving Collateral Agent may enforce the provisions of the Term Collateral Documents or ABL Revolving Collateral Documents, as applicable, and exercise any and all rights, powers and remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent or receiver appointed by them to Dispose of its Collateral, to incur ex-penses in connection with such Disposition, and to exercise all the rights and remedies of a secured credi-tor under applicable law.
3.4. Claimholders Permitted Actions. Anything to the contrary in Sections 3.1 and 3.2 not-withstanding, each of the Term Agents and the ABL Revolving Collateral Agent may, but shall not be obligated to:
(a) if an Insolvency Proceeding has been commenced by or against any Grantor, file a proof of claim or statement of interest with respect to its Collateral or otherwise with respect to the Term Obligations or the ABL Revolving Obligations, as the case may be, or otherwise file any pleadings, objections, motions or agreements which assert rights or interests available to un-secured creditors of such Grantor arising under any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Code, the BIA, the CCAA or other comparable laws of any applicable jurisdiction);
(b) take any action in order to create, perfect, preserve or protect (but not enforce) its Lien in and to its Collateral except to the extent inconsistent with the provisions hereof;
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(c) file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding, or other pleading made by any person objecting to or otherwise seeking the disallowance or subordination of its claims or those of its Claimholders or the avoidance of its Liens;
(d) make any arguments and motions that are, in each case, in accordance with the terms of this Agreement;
(e) join (but not exercise any control with respect to) any judicial foreclosure pro-ceeding or other judicial lien enforcement proceeding with respect to the Priority Collateral of the other party initiated by such other party (it being understood that, (a) with respect to ABL Re-volving Priority Collateral, until the Discharge of the ABL Revolving Obligations has occurred, neither the Term Agents nor any Term Claimholder shall be entitled to receive any proceeds thereof unless otherwise expressly permitted herein and (b) with respect to the Notes Priority Col-lateral, until the Discharge of the Term Obligations has occurred, neither the ABL Revolving Col-lateral Agent nor any ABL Revolving Claimholder shall be entitled to receive any proceeds thereof unless otherwise expressly permitted herein); and
(f) take any action described in clauses (i) through (x) of the definition of Exercise of Secured Creditor Remedies
Anything to the contrary in Sections 3.1 and 3.2 notwithstanding, in any Insolvency Proceeding, the Term Claimholders and ABL Revolving Claimholders may vote (in accordance with the respective Term Documents and ABL Revolving Loan Documents) on any plan of reorganization, except to the ex-tent inconsistent with the provisions hereof.
Except as expressly set forth in this Agreement, each Term Agent on behalf of each applicable Term Claimholder and the ABL Revolving Collateral Agent on behalf of each ABL Revolving Claim-holder shall have any and all rights and remedies it may have as a secured creditor under any applicable law, including the right to the Exercise of Secured Creditor Remedies; provided, however, that the Exer-cise of Secured Creditor Remedies with respect to the Collateral (and any judgment Lien obtained in con-nection therewith) shall be subject to the Lien priorities set forth herein and to the provisions of this Agreement. Subject to Section 3.7, the ABL Revolving Collateral Agent may enforce the provisions of the ABL Revolving Loan Documents, each Term Agent may enforce the provisions of the Term Docu-ments, as the case may be, and each may Exercise Any Secured Creditor Remedies, all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of this Agreement and mandatory provisions of applicable law; provided, however, that each of the ABL Revolving Collateral Agent and each Term Agent agrees to provide to the other (x) an Enforcement No-tice prior to its Exercise of Secured Creditor Remedies and (y) copies of any notices that it is required under applicable law to deliver to the Company or any other Grantor in connection with any Exercise of Secured Creditor Remedies; provided further, however, that the ABL Revolving Collateral Agent’s fail-ure to provide copies of any such notices to the applicable Term Agent shall not impair any of the ABL Revolving Collateral Agent’s rights hereunder or under any of the ABL Revolving Loan Documents and the applicable Term Agent’s failure to provide copies of any such notices to the ABL Revolving Collat-eral Agent shall not impair any of the Term Agents’ rights hereunder or under any of the Term Docu-ments. Each of the Term Agent on behalf of each Term Claimholder and the ABL Revolving Collateral Agent for itself and on behalf of each ABL Revolving Claimholder agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim, in the case of each Term Agent and each Term Claimholder, against either the ABL Revolving Collateral Agent or any other ABL Revolving Claimholder, and in the case of the ABL Revolving Collateral Agent and each
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other ABL Revolving Claimholder, against any Term Agent or any other Term Claimholder, seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such person with respect to the Collateral which is consistent with the terms of this Agreement, and none of such parties shall be liable for any such action taken or omitted to be taken.
3.5. Retention of Proceeds.
(a) Prior to the Discharge of ABL Revolving Obligations, the Term Claimholders will be entitled to retain proceeds of Notes Priority Collateral in connection with an Exercise of Secured Creditor Remedies that is not prohibited under Section 3.1. The Term Claimholders shall not be permit-ted to retain any proceeds of ABL Revolving Priority Collateral in connection with any Exercise of Se-cured Creditor Remedies in any circumstance unless and until the Discharge of ABL Revolving Obliga-tions has occurred, and any such proceeds received or retained in any other circumstance will be subject to Section 4.2.
(b) Prior to the Discharge of Term Obligations, the ABL Revolving Claimholders will be entitled to retain proceeds of ABL Revolving Priority Collateral in connection with an Exercise of Secured Creditor Remedies that is not prohibited under Section 3.2. The ABL Revolving Claimholders shall not be permitted to retain any proceeds of Notes Priority Collateral in connection with any Exercise of Secured Creditor Remedies in any circumstance unless and until the Discharge of Term Obligations has occurred, and any such proceeds received or retained in any other circumstance will be subject to Sec-tion 4.2.
3.6. Non-Interference by the Term Agents. Subject to Sections 3.1, 3.2, 3.3, 3.4, and 6.5(a), each of the Term Agents, on behalf of the Term Claimholders, until the Discharge of ABL Revolving Ob-ligations has occurred:
(a) will not exercise or seek to exercise any rights or remedies with respect to any ABL Revolving Priority Collateral;
(b) will not knowingly take or cause to be taken any action to make any Lien that the holders of the Term Obligations have on the ABL Revolving Priority Collateral equal with, or to give any Term Agent or any Term Claimholder any preference or priority relative to, any Lien that the holders of any ABL Revolving Obligations secured by any ABL Revolving Priority Collateral have with respect to such ABL Revolving Priority Collateral;
(c) will not challenge or question in any proceeding the validity or enforceability of any security interest in the ABL Revolving Priority Collateral, the validity, attachment, perfection or priority of any Lien held by the holders of any ABL Revolving Obligations secured by any ABL Revolving Priority Collateral;
(d) will not knowingly take or cause to be taken any action to interfere, hinder or de-lay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other dis-position of the ABL Revolving Priority Collateral by the ABL Revolving Collateral Agent or any ABL Revolving Claimholder secured by such ABL Revolving Priority Collateral, whether by foreclosure or otherwise;
(e) will have no right to (i) direct the ABL Revolving Collateral Agent or any holder of any ABL Revolving Obligations secured by any ABL Revolving Priority Collateral to exercise any right, remedy or power with respect to such ABL Revolving Priority Collateral or (ii) consent
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to the exercise by the ABL Revolving Collateral Agent or any holder of any ABL Revolving Ob-ligations secured by the ABL Revolving Priority Collateral of any right, remedy or power with respect to such ABL Revolving Priority Collateral;
(f) will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the ABL Revolving Collateral Agent or any holder of any ABL Re-volving Obligations secured by any ABL Revolving Priority Collateral seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither the ABL Revolving Collateral Agent nor any holders of any ABL Revolving Obligations secured by any ABL Revolving Priority Collateral will be liable for, any action taken or omitted to be taken by the ABL Revolving Collateral Agent or such lenders with respect to such ABL Revolv-ing Priority Collateral;
(g) will not object to (and waive any and all claims with respect to) the forbearance by the ABL Revolving Collateral Agent from exercising any remedies with respect to the ABL Revolving Priority Collateral;
(h) will not seek, and will waive any right, to have any ABL Revolving Priority Col-lateral or any part thereof marshaled upon any foreclosure, realization or other disposition of such ABL Revolving Priority Collateral; and
(i) will not attempt, directly or indirectly, whether by judicial proceedings or other-wise, to challenge the enforceability of any provision of this Agreement.
3.7. Non-Interference by the ABL Revolving Collateral Agent. Subject to Sections 3.1, 3.2, 3.3, 3.4, and 6.5(b), the ABL Revolving Collateral Agent, on behalf of the ABL Revolving Claimholders, until the Discharge of Term Obligations has occurred:
(a) will not exercise or seek to exercise any rights or remedies with respect to any Notes Priority Collateral;
(b) will not knowingly take or cause to be taken any action to make any Lien that the holders of the ABL Revolving Obligations have on the Notes Priority Collateral equal with, or to give the ABL Revolving Collateral Agent or any ABL Revolving Claimholder any preference or priority relative to, any Lien that the holders of any Term Obligations secured by any Notes Prior-ity Collateral have with respect to such Notes Priority Collateral;
(c) will not challenge or question in any proceeding the validity or enforceability of any security interest in the Notes Priority Collateral, the validity, attachment, perfection or priori-ty of any Lien held by the holders of any Term Obligations secured by any Notes Priority Collat-eral;
(d) will not knowingly take or cause to be taken any action to interfere, hinder or de-lay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other dis-position of the Notes Priority Collateral by any Term Agent or any Term Claimholder secured by such Notes Priority Collateral, whether by foreclosure or otherwise;
(e) will have no right to (i) direct any Term Agent or any holder of any Term Obliga-tions secured by any Notes Priority Collateral to exercise any right, remedy or power with respect to such Notes Priority Collateral or (ii) consent to the exercise by any Term Agent or any holder
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of any Term Obligations secured by the Notes Priority Collateral of any right, remedy or power with respect to such Notes Priority Collateral;
(f) will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against any Term Agent or any holder of any Term Obligations secured by any Notes Priority Collateral seeking damages from or other relief by way of specific perfor-mance, instructions or otherwise with respect to, and neither the Term Agents nor any holders of any Term Obligations secured by any Notes Priority Collateral will be liable for, any action taken or omitted to be taken by any Term Agent or such lenders with respect to such Notes Priority Col-lateral;
(g) will not object to (and waive any and all claims with respect to) the forbearance by any Term Agent from exercising any remedies with respect to the Notes Priority Collateral;
(h) will not seek, and will waive any right, to have any Notes Priority Collateral or any part thereof marshaled upon any foreclosure, realization or other disposition of such Notes Priority Collateral; and
(i) will not attempt, directly or indirectly, whether by judicial proceedings or other-wise, to challenge the enforceability of any provision of this Agreement.
3.8. Commercially Reasonable Dispositions. Each Term Agent, for itself and on behalf of the Term Claimholders, hereby irrevocably, absolutely, and unconditionally waives any right to object (and seek or be awarded any relief of any nature whatsoever based on any such objection), at any time prior or subsequent to any Disposition of any of the ABL Revolving Priority Collateral, on the ground(s) that any such Disposition of ABL Revolving Priority Collateral (a) would not be or was not “commercially rea-sonable” within the meaning of any applicable UCC, PPSA or applicable law and/or (b) would not or did not comply with any other requirement under any applicable UCC, PPSA or under any other applicable law governing the manner in which a secured creditor (including one with a Lien on real property) is to realize on its collateral. The ABL Revolving Collateral Agent, for itself and on behalf of the ABL Re-volving Claimholders, hereby irrevocably, absolutely and unconditionally waives any right to object (and seek or be awarded any relief of any nature whatsoever based on any such objection), at any time prior to or subsequent to any Disposition of any Notes Priority Collateral, on the ground(s) that any such Disposi-tion of Notes Priority Collateral (a) would not be or was not “commercially reasonable” within the mean-ing of any applicable UCC, PPSA or applicable law and/or (b) would not or did not comply with any oth-er requirement under any applicable UCC, PPSA or under any other applicable law governing the manner in which a secured creditor (including one with a Lien on real property) is to realize on its collateral.
3.9. Inspection and Access Rights; Intellectual Property License.
(a) If any Term Agent, or any agent or representative of such Term Agent, or any re-ceiver, shall, after any Term Default, obtain possession or physical control of any of the real properties of any Grantor subject to a Mortgage or otherwise, such Term Agent shall promptly notify the ABL Revolv-ing Collateral Agent in writing of that fact, and the ABL Revolving Collateral Agent shall, within thirty (30) Business Days thereafter, notify such Term Agent in writing as to whether the ABL Revolving Col-lateral Agent desires to exercise access rights under this Section 3.9. In addition, if the ABL Revolving Collateral Agent, or any agent or representative of the ABL Revolving Collateral Agent, or any receiver, shall obtain possession or physical control of any of the real properties subject to a Mortgage or any of the tangible Notes Priority Collateral located on any premises other than real properties subject to a Mortgage or control over any intangible Notes Priority Collateral, following the delivery to the Term Agents of an Enforcement Notice, then the ABL Revolving Collateral Agent shall promptly notify each Term Agent in
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writing that the ABL Revolving Collateral Agent is exercising its access rights under this Agreement and its rights under Section 3.10 under either circumstance. Upon delivery of such notice by the ABL Re-volving Collateral Agent to the Term Agents, the parties shall cooperate in good faith with respect to the ABL Revolving Collateral Agent’s exercise of such access rights. Consistent with the definition of “Use Period,” access rights may apply to differing parcels of real properties at differing times, in which case, a differing Use Period will apply to each such property.
(b) Without limiting any rights the ABL Revolving Collateral Agent or any other ABL Revolving Claimholder may otherwise have under applicable law or by agreement and whether or not any Term Agent or any other Term Claimholder has commenced and is continuing to Exercise Any Secured Creditor Remedies of such Term Agent, the Term Claimholders (i) will cooperate with the ABL Revolving Collateral Agent in its efforts to enforce its security interest in the ABL Revolving Priority Collateral, (ii) will not hinder or restrict in any respect the ABL Revolving Collateral Agent from enforc-ing its security interest in the ABL Revolving Priority Collateral or from finishing any work-in-process or assembling the ABL Revolving Priority Collateral, and (iii) will, subject to the rights of any landlords under real estate leases, permit the ABL Revolving Collateral Agent, its employees, agents, advisers and representatives or any other Person (including any ABL Revolving Claimholder) acting with the consent, or on behalf, of the ABL Revolving Collateral Agent, at the sole cost and expenses of the ABL Revolving Collateral Agent and ABL Revolving Claimholders, upon reasonable advance written notice to such Term Agent, during the Use Period (a) during normal business hours on any Business Day, to access ABL Re-volving Priority Collateral that (i) is stored or located in or on, (ii) has become an accession with respect to (within the meaning of Section 9-335 of the UCC or the applicable provision in the PPSA), or (iii) has been commingled with (within the meaning of Section 9-336 of the UCC or the applicable provision in the PPSA), Notes Priority Collateral, and (b) to access the Notes Priority Collateral (including, without limitation, Equipment, Fixtures, intellectual property, General Intangibles, Intangibles, real property, pro-cessors, computers and other machinery related to the storage or processing of records, documents or files), in order to assemble, inspect, copy or download information stored on, take actions to perfect its Lien on, complete a production run of Inventory, take possession of, move, prepare and advertise for sale, sell (by public auction, private sale or a “store closing,” “going out of business” or similar sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include augmented Inventory of the same type sold in any ABL Revolving Borrower’s or ABL Revolving Guar-antor’s business), store, take reasonable actions to protect, secure and otherwise enforce the rights of the ABL Revolving Collateral Agent in and to the ABL Revolving Priority Collateral or otherwise deal with the ABL Revolving Priority Collateral, in each case without the involvement of or interference by any Term Claimholder, provided, however that nothing contained herein will restrict the rights of any Term Agent from selling, assigning or otherwise transferring any Notes Priority Collateral prior to the expira-tion of such Use Period if the purchaser, assignee or transferee thereof agrees to be bound by the provi-sions of this Agreement. If the ABL Revolving Collateral Agent conducts a public auction or private sale of the ABL Revolving Priority Collateral, the ABL Revolving Collateral Agent shall provide each Term Agent with reasonable notice and use reasonable efforts to hold such auction or sale in a manner which would not unduly disrupt each Term Agent’s use of such real property.
(c) During the period of actual occupation, use and/or control by the ABL Revolving Claimholders and/or the ABL Revolving Collateral Agent (or their respective employees, agents, advisers and representatives) of any Notes Priority Collateral, the ABL Revolving Claimholders and the ABL Re-volving Collateral Agent shall not be required to pay rent or other occupation charge but shall be obligat-ed to repair at their expense any actual physical damage to such Notes Priority Collateral or other assets or property resulting from such occupancy, use or control, and to leave such Notes Priority Collateral in substantially the same condition as it was at the commencement of such occupancy, use or control, ordi-nary wear and tear excepted. Notwithstanding the foregoing, in no event shall the ABL Revolving
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Claimholders or the ABL Revolving Collateral Agent have any liability to the Term Claimholders and/or to each Term Agent pursuant to this Section 3.9 as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Notes Priority Collateral existing prior to the date of the exercise by the ABL Revolving Claimholders (or the ABL Revolving Collateral Agent (or their re-spective employees, agents, advisers and representatives), as the case may be) of their rights under this Section 3.9 and the ABL Revolving Claimholders shall have no duty or liability to maintain the Notes Priority Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by ABL Revolving Claimholders, or for any diminution in the value of the Notes Priority Collat-eral that results from ordinary wear and tear resulting from the use of the Notes Priority Collateral by the ABL Revolving Claimholders in the manner and for the time periods specified under this Section 3.9. Without limiting the rights granted in this Section 3.9, the ABL Revolving Claimholders and the ABL Revolving Collateral Agent shall cooperate with the Term Claimholders and/or the Term Agents as may be reasonably requested by any Term Agent in connection with any efforts made by the Term Claimhold-ers and/or the Term Agents to sell the Notes Priority Collateral.
(d) The ABL Revolving Collateral Agent and the ABL Revolving Claimholders shall not be obligated to pay any amounts to the Term Agents or the Term Claimholders (or any Person claim-ing by, through or under the Term Claimholders, including any purchaser of the Notes Priority Collateral) or to the ABL Revolving Guarantors or ABL Revolving Borrowers, for or in respect of the use by the ABL Revolving Collateral Agent and the ABL Revolving Claimholders of the Notes Priority Collateral; except as otherwise set forth in Section 3.9(c).
(e) The ABL Revolving Claimholders shall use the Notes Priority Collateral in ac-cordance with applicable law.
(f) Any Term Agents and the other Term Claimholders shall use commercially rea-sonable efforts to not hinder or obstruct the ABL Revolving Collateral Agent and the other ABL Revolv-ing Claimholders from exercising the rights described in Section 3.9(b).
(g) Subject to the terms hereof, each Term Agent may advertise and conduct public auctions or private sales of the Notes Priority Collateral, without the involvement of or interference by any ABL Revolving Claimholder or liability to any ABL Revolving Claimholder as long as, in the case of an actual sale, the respective purchaser assumes and agrees in advance in writing to the obligations of such Term Agent and the Term Claimholders under this Section 3.9.
(h) Notwithstanding anything in this Section 3 to the contrary, each Term Agent, for itself and each of the other Term Claimholders, hereby grants in favor of the ABL Revolving Collateral Agent and its agents, representatives and designees, for themselves and on behalf of the ABL Revolving Claimholders, an irrevocable royalty-free, rent-free, nonexclusive right to use, license and/or sublicense, to the extent permitted by law and any applicable contractual obligations binding on the Notes Priority Collateral, and solely to the extent such Term Agent in respect of the Notes Priority Collateral (or any Term Claimholder or any transferee or assignee of any of such Notes Priority Collateral) has an owner-ship interest therein or other assignable right of use thereto, exercisable without compensation, any now existing or hereafter acquired Notes Priority Collateral, including any computer or other data process equipment, intellectual property, trademarks and trade names now or hereafter owned by, licensed to, or otherwise used by the ABL Revolving Borrowers or ABL Revolving Guarantors, for the purpose of ena-bling the ABL Revolving Collateral Agent and with the consent of the ABL Revolving Collateral Agent the ABL Revolving Claimholders to assemble, prepare for sale, advertise, market and dispose of any and all ABL Revolving Priority Collateral, wherever such ABL Revolving Priority Collateral may be located, including all such license and right to access to all media in which any of the licensed items may be rec-
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orded or stored and to all computer software and programs used for the compilation or printout thereof in order for the ABL Revolving Collateral Agent to collect all accounts included in the ABL Revolving Pri-ority Collateral, to copy, use or preserve any and all information relating to any of the ABL Revolving Priority Collateral and purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute, package, complete the manufacture of or otherwise dispose of any work-in-process, raw materials and complete inventory included in the ABL Revolving Priority Collateral in con-nection with the liquidation, disposition, foreclosure or realization upon the inventory included in the ABL Revolving Priority Collateral in accordance with the terms of the ABL Revolving Collateral Docu-ment in respect of the ABL Revolving Priority Collateral. The license and right herein shall continue in full force and effect as a burden on the Notes Priority Collateral until all ABL Revolving Priority Collat-eral has been sold, transferred or otherwise disposed of notwithstanding (i) any exercise of remedies by any Term Agent or any Term Claimholder with respect to any Notes Priority Collateral or (ii) any volun-tary or involuntary transfer or assignment of any of such Notes Priority Collateral consisting of intellectu-al property or any rights therein (whether by any Grantor, by any Term Claimholder or otherwise) (the time period of such license and right, the “IP Use Period”). This license and right shall inure to the bene-fit of the ABL Revolving Collateral Agent and the ABL Revolving Claimholders and their successors, assigns and transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclo-sure, deed in lieu of foreclosure or otherwise. Such license and right is granted free of charge, without requirement that any monetary payment whatsoever including, without limitation, any royalty or license fee, be made to the applicable Term Agent or any Term Claimholder or any other Person by the ABL Re-volving Collateral Agent or any ABL Revolving Claimholder or any other Person. Each Term Agent, for itself and each of the Term Claimholders, agrees not to interfere, hinder, restrict or delay the exercise by the ABL Revolving Collateral Agent or the ABL Revolving Claimholders of any such license and right granted herein and agrees to execute such documentation and complete such other acts as may be required by the ABL Revolving Collateral Agent or the ABL Revolving Claimholders in connection with the exer-cise of such license and right, including preservation of such license and right against any Person (includ-ing any voluntary or involuntary transferee of such Notes Priority Collateral consisting of intellectual property). The rights and remedies of the ABL Revolving Collateral Agent and the ABL Revolving Claimholders in this Section 3.9 are in addition to and not in limitation of the rights and remedies under the ABL Revolving Loan Documents or applicable law. The provisions of this Section 3.9 are agreed to solely as among any Term Agents, the ABL Revolving Collateral Agent and the Claimholders and shall not be deemed to expand or otherwise modify any rights granted by any Grantor to the Agents or the Claimholders under any of the Term Documents or ABL Revolving Loan Documents. The Term Agents shall not foreclose or otherwise sell or dispose of any of the Notes Priority Collateral during the IP Use Period unless such sale or disposition is subject to the terms of this Section 3.9. The rights of ABL Re-volving Collateral Agent and ABL Revolving Claimholders under this Section 3.9 during the IP Use Pe-riod shall continue notwithstanding such foreclosure, sale or other disposition by any Term Agent.
3.10. Sharing of Information and Access. In the event that the ABL Revolving Collateral Agent shall, in the exercise of its rights under the ABL Revolving Collateral Documents or otherwise, receive possession or control of any books and records of any Grantor which contain information identi-fying or pertaining to the Notes Priority Collateral, the ABL Revolving Collateral Agent shall to the ex-tent permitted by applicable law, upon written request from any Term Agent and as promptly as practica-ble thereafter, either make available to the Term Agents such books and records for inspection and dupli-cation or provide to the Term Agents copies thereof. In the event that any Term Agent shall, in the exer-cise of its rights under the Notes Collateral Documents or otherwise, receive possession or control of any books and records of any Grantor which contain information identifying or pertaining to any of the ABL Revolving Priority Collateral, the Term Agents shall to the extent permitted by applicable law, upon writ-ten request from the ABL Revolving Collateral Agent and as promptly as practicable thereafter, either
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make available to the ABL Revolving Collateral Agent such books and records for inspection and dupli-cation or provide the ABL Revolving Collateral Agent copies thereof.
3.11. Tracing of and Priorities in Proceeds. The ABL Revolving Collateral Agent, for itself and on behalf of the ABL Revolving Claimholders, and each Term Agent, for itself and on behalf of the Term Claimholders, further agree that until the earlier of delivery of any Enforcement Notice by such Claimholder or commencement of an Insolvency Proceeding, any proceeds of Collateral obtained in ac-cordance with the terms of the ABL Revolving Loan Documents and the Term Documents, whether or not deposited under control agreements, which are used by any Grantor to acquire other property which is Collateral shall not (solely as between the Claimholders) be treated as Proceeds of Collateral for purposes of determining the relative priorities in the Collateral which was so acquired; provided, however, that the foregoing shall not apply to any Collateral obtained as a result of collusion between any Claimholder and any Grantor in violating the rights of such Claimholder within the meaning of Section 9-332 of the UCC or otherwise under applicable law and provided further that after delivery of an Enforcement Notice by a Term Agent or commencement of any Insolvency Proceeding, any identifiable or traceable proceeds of Notes Priority Collateral shall be treated as Notes Priority Collateral.
3.12. No Duties With Respect to Other Obligations.
(a) Notwithstanding anything to the contrary herein, neither the ABL Revolving Col-lateral Agent nor ABL Revolving Claimholders will have any duties or other obligations to any Term Claimholder with respect to the ABL Revolving Priority Collateral, other than to serve as agent for per-fection with respect to certain ABL Revolving Priority Collateral and to transfer to the Applicable Term Agent (i) any proceeds of any such ABL Revolving Priority Collateral in which any Term Agent contin-ues to hold a remaining security interest following any sale, transfer or other disposition of such ABL Re-volving Priority Collateral (in each case, unless the holders’ lien on all such ABL Revolving Priority Col-lateral is terminated and released prior to or concurrently with such sale, transfer, disposition, payment or satisfaction), following the Discharge of ABL Revolving Obligations and the termination of any com-mitment to extend credit that would constitute ABL Revolving Obligations, or (ii) if the ABL Revolving Collateral Agent is in possession of all or any part of such ABL Revolving Priority Collateral after the Discharge of ABL Revolving Obligations, such ABL Revolving Priority Collateral or any part thereof remaining, in each case without representation or warranty on the part of the ABL Revolving Collateral Agent or any ABL Revolving Claimholder. In addition, until the Discharge of ABL Revolving Obliga-tions, the ABL Revolving Collateral Agent will be entitled, for the benefit of the ABL Revolving Claim-holders, to sell, transfer or otherwise dispose of or deal with such ABL Revolving Priority Collateral without regard to any junior-priority security interest therein of any Term Agent or any rights to which any Term Claimholder would otherwise be entitled as a result of such junior-priority security interest. Without limiting the foregoing, neither the ABL Revolving Collateral Agent nor any ABL Revolving Claimholder shall have any duty or obligation first to marshal or realize upon the ABL Revolving Priority Collateral, or to sell, dispose of or otherwise liquidate all or any portion of the ABL Revolving Priority Collateral, in any manner that would maximize the return to the Term Claimholders, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of pro-ceeds actually received by the Term Claimholders from such realization, sale, disposition or liquidation.
(b) Notwithstanding anything to the contrary herein, none of the Term Agents or Term Claimholders will have any duties or other obligations to any ABL Revolving Claimholder with respect to the Notes Priority Collateral, other than to serve as agent for perfection with respect to certain Notes Priority Collateral and to transfer to the ABL Revolving Collateral Agent (i) any proceeds of any such Notes Priority Collateral in which the ABL Revolving Collateral Agent continues to hold a remain-ing security interest following any sale, transfer or other disposition of such Notes Priority Collateral (in
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each case, unless the holders’ lien on all such Notes Priority Collateral is terminated and released prior to or concurrently with such sale, transfer, disposition, payment or satisfaction), following the Discharge of Term Obligations and the termination of any commitment to extend credit that would constitute Term Obligations, or (ii) if the Term Agents are in possession of all or any part of such Notes Priority Collateral after the Discharge of Term Obligations, such Notes Priority Collateral or any part thereof remaining, in each case without representation or warranty on the part of any Term Agent or any Term Claimholder. In addition, until the Discharge of Term Obligations, each Term Agent will be entitled, for the benefit of the applicable Term Claimholders, to sell, transfer or otherwise dispose of or deal with such Notes Priority Collateral without regard to any junior-priority security interest therein of the ABL Revolving Collateral Agent or any rights to which any ABL Revolving Claimholder would otherwise be entitled as a result of such junior-priority security interest. Without limiting the foregoing, no Term Agent or Term Claimhold-er shall have any duty or obligation first to marshal or realize upon the Notes Priority Collateral, or to sell, dispose of or otherwise liquidate all or any portion of the Notes Priority Collateral, in any manner that would maximize the return to the ABL Revolving Claimholders, notwithstanding that the order and tim-ing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the ABL Revolving Claimholders from such realization, sale, disposition or liquidation.
(c) Notwithstanding anything herein to the contrary, each Term Agent waives, and each Term Claimholder by its acceptance of the benefits of the Notes, indebtedness under the First Lien Credit Facility or Pari Passu Lien Indebtedness, as applicable, hereby waives, any claim that may be had against the ABL Revolving Collateral Agent or any ABL Revolving Claimholders arising out of (i) any actions which the ABL Revolving Collateral Agent or the ABL Revolving Claimholders take or omit to take (including, actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the ABL Re-volving Obligations from any account debtor, guarantor or any other party, other than actions or omis-sions in breach of the express provisions of this Agreement) or the valuation, use, protection or release of any security for such ABL Revolving Obligations or (ii) subject to Section 6.2, any borrowing of, or grant of a Lien or administrative expense priority by the Company or any of its Subsidiaries as debtor-in pos-session under Section 364 of the Bankruptcy Code or in any Canadian Insolvency Proceeding or other Insolvency Proceeding.
(d) Notwithstanding anything herein to the contrary, the ABL Revolving Collateral Agent hereby waives, and each ABL Revolving Claimholder by its acceptance of the benefits of the ABL Revolving Obligations, hereby waives, any claim that may be had against any Term Agent or any Term Claimholders arising out of (i) any actions which any Term Agent or the Term Claimholders take or omit to take (including, actions with respect to the creation, perfection or continuation of Liens on any Collat-eral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize up-on, any of the Collateral and actions with respect to the collection of any claim for all or any part of the Term Obligations from any account debtor, guarantor or any other party, other than actions or omissions in breach of the express provisions of this Agreement) or the valuation, use, protection or release of any security for such Term Obligations or (ii) subject to Section 6.2, any borrowing of, or grant of a Lien or administrative expense priority by the Company or any of its Subsidiaries as debtor-in possession under Section 364 of the Bankruptcy Code or in any Canadian Insolvency Proceeding or other Insolvency Pro-ceeding.
SECTION 4. Proceeds.
4.1. Application of Proceeds.
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(a) Whether or not any Insolvency Proceeding has been commenced by or against any Grantor, any ABL Revolving Priority Collateral or proceeds thereof received in connection with any Exercise of Secured Creditor Remedies (including as a result of any distribution of or in respect of any ABL Revolving Priority Collateral (whether or not expressly characterized as such) or in any Insolvency Proceeding) shall be applied: (i) first, to the payment in full in cash or, to the extent permitted by the ABL Revolving Loan Documents, cash collateralization, of all ABL Revolving Obligations in accordance with the ABL Revolving Loan Documents and (ii) second, after the Discharge of ABL Revolving Obliga-tions, to the payment in full in cash of the Term Obligations in accordance with the Term Documents and the Term Intercreditor Agreement.
(b) Whether or not any Insolvency Proceeding has been commenced by or against any Grantor, any Notes Priority Collateral or proceeds thereof received in connection with any Exercise of Secured Creditor Remedies (including as a result of any distribution of or in respect of any Notes Prior-ity Collateral (whether or not expressly characterized as such) or in any Insolvency Proceeding) shall be applied: (i) first, to the payment in full in cash or, to the extent permitted by the Term Documents, cash collateralization of the Term Obligations in accordance with the Term Documents and (ii) second, after the Discharge of Term Obligations to the payment in full in cash or, to the extent permitted by the ABL Revolving Loan Documents, cash collateralization of the ABL Revolving Obligations in accordance with the ABL Revolving Loan Documents.
(c) If any Exercise of Secured Creditor Remedies with respect to the Collateral pro-duces non-cash proceeds, then such non-cash proceeds shall be held by the Agent that conducted the Ex-ercise of Secured Creditor Remedies as additional Collateral and, at such time as such non-cash proceeds are monetized, shall be applied as set forth above.
4.2. Turnover. Unless and until the earlier of the Discharge of ABL Revolving Obligations or the Discharge of Term Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, except as otherwise provided in Section 3.5, (a) if any Term Agent or any Term Claimholder obtains possession of any ABL Revolving Priority Collateral or realizes any proceeds or payment in respect of the ABL Revolving Priority Collateral (including in each case, assets or proceeds subject to Liens referred to in Section 2.3), pursuant to any Term Collateral Document or by the exercise of any rights available to it under applicable law or in any Canadian Insolvency Proceeding or other Insolvency Proceeding or through any other exercise of remedies, at any time when any ABL Re-volving Obligations secured or intended to be secured by such ABL Revolving Priority Collateral remains outstanding or any commitment to extend credit that would constitute ABL Revolving Obligations se-cured or intended to be secured by such ABL Revolving Priority Collateral remains in effect, then it will hold such ABL Revolving Priority Collateral, proceeds or payments in trust on behalf of the ABL Re-volving Collateral Agent and the ABL Revolving Claimholders and reasonably promptly after obtaining actual knowledge or notice from the ABL Revolving Collateral Agent that such Person has possession of such proceeds or payments, transfer or pay over to the ABL Revolving Collateral Agent for the benefit of the ABL Revolving Claimholders, in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, and (b) if ABL Revolving Collateral Agent or any ABL Revolving Claimholder obtains possession of any Notes Priority Collateral or realizes any proceeds or payment in respect of the Notes Priority Collateral (including in each case, assets or proceeds subject to Liens referred to in Section 2.3), pursuant to any ABL Revolving Collateral Document or by the exercise of any rights available to it under applicable law or in any Canadian Insolvency Proceeding or other In-solvency Proceeding or through any other exercise of remedies, at any time when any Term Obligations secured or intended to be secured by such Notes Priority Collateral remains outstanding or any commit-ment to extend credit that would constitute Term Obligations secured or intended to be secured by such Notes Priority Collateral remains in effect, then it will hold such Notes Priority Collateral proceeds or
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payments in trust on behalf of the Term Agents and the Term Claimholders and reasonably promptly after obtaining actual knowledge or notice from the Applicable Term Agent that such Person has possession of such proceeds or payments, transfer or pay over to the Applicable Term Agent for the benefit of the Term Claimholders, in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. Each of the Term Agents and the ABL Revolving Collateral Agent is hereby authorized to make any such endorsements as agent for the other or any Claimholders. This au-thorization is coupled with an interest and is irrevocable until the earlier of the Discharge of ABL Revolv-ing Obligations or the Discharge of Term Obligations.
Each Term Agent for itself and each Term Claimholder by its acceptance of the Notes, indebtedness under the First Priority Credit Facility or Pari Passu Lien Indebtedness, as applicable, here-by agrees that if, at any time, all or part of any payment with respect to any ABL Revolving Obligations secured by any ABL Revolving Priority Collateral previously made shall be rescinded for any reason whatsoever, it will promptly pay over to ABL Revolving Collateral Agent any payment received by it in respect of any such ABL Revolving Priority Collateral and shall promptly turn any such ABL Revolving Priority Collateral then held by it over to ABL Revolving Collateral Agent, and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfac-tion in full of such ABL Revolving Obligations.
The ABL Revolving Collateral Agent for itself and each ABL Revolving Claimholder by its acceptance of the ABL Revolving Obligations, hereby agrees that if, at any time, all or part of any payment with respect to any Term Obligations secured by any Notes Priority Collateral previously made shall be rescinded for any reason whatsoever, it will promptly pay over to the Applicable Term Agent any payment received by it in respect of any such Notes Priority Collateral and shall promptly turn any such Notes Priority Collateral then held by it over to the Applicable Term Agent, and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfac-tion in full of such Term Obligations.
4.3. No Subordination of the Relative Priority of Claims. Anything to the contrary contained herein notwithstanding, the subordination of the Liens of Term Claimholders to the Liens of ABL Re-volving Claimholders and of the Liens of ABL Revolving Claimholders to the Liens of Term Claimhold-ers as set forth herein is with respect to the priority of the respective Liens held by or on behalf of them only and shall not constitute a subordination of the Term Obligations to the ABL Revolving Obligations or the ABL Revolving Obligations to the Term Obligations.
4.4. Application of Payments. Subject to the other terms of this Agreement, all payments re-ceived (not in violation of this Agreement) by (a) ABL Revolving Collateral Agent or the ABL Revolving Claimholders may be applied, reversed and reapplied, in whole or in part, to the ABL Revolving Obliga-tions to the extent provided for in the ABL Revolving Loan Documents and (b) any Term Agent or the Term Claimholders may be applied, reversed and reapplied, in whole or in part, to the Term Obligations to the extent provided for in the Term Documents.
4.5. Revolving Nature of Revolving Obligations. Each Term Agent, on behalf of the Term Claimholders, acknowledges and agrees that the ABL Revolving Credit Agreement includes a revolving commitment and that the amount of the ABL Revolving Obligations that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed.
SECTION 5. Releases; Dispositions; Other Agreements.
5.1. Releases.
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(a) Prior to the Discharge of ABL Revolving Obligations, the ABL Revolving Col-lateral Agent shall have the exclusive right to make determinations regarding the release or Disposition of any ABL Revolving Priority Collateral pursuant to the terms of the ABL Revolving Loan Documents and in accordance with the provisions of this Agreement, in each case upon five Business Days’ prior written notice to the Term Agents, but without any consultation with or consent of any Term Agent or any Term Claimholder; provided, however, that the ABL Revolving Collateral Agent shall use commercially rea-sonable efforts to provide ten days prior written notice to the Term Agents before any Disposition by the ABL Revolving Collateral Agent by public auction, private sale or a “store closing,” “going out of busi-ness” or similar sale, whether in bulk, in lots or any other Disposition of such Collateral not in the ordi-nary course of a Grantor’s business.
(b) If, in connection with the Exercise of Secured Creditor Remedies by the ABL Revolving Collateral Agent, including any Default Disposition of the ABL Revolving Priority Collateral, as provided for in Section 3, irrespective of whether an ABL Revolving Default or a Term Default has occurred and is continuing, the ABL Revolving Collateral Agent releases any of its Liens on any part of the ABL Revolving Priority Collateral, then the Liens of the Term Agents on such ABL Revolving Priori-ty Collateral shall be automatically, unconditionally, and simultaneously released and terminated; provid-ed, however, that any proceeds remaining after the Discharge of ABL Revolving Obligations shall con-tinue to be subject to the Liens of the Term Claimholders. Each Term Agent, for itself or on behalf of any such Term Claimholders, promptly shall execute and deliver to the ABL Revolving Collateral Agent such termination or amendment statements, releases, and other documents provided to it as the ABL Revolving Collateral Agent may reasonably request to effectively confirm such release, at the cost and expense of the Company and without the consent or direction of any other Term Claimholders.
(c) Prior to the Discharge of Term Obligations, the Term Agents shall have the ex-clusive right vis-à-vis the ABL Revolving Collateral Agent to make determinations regarding the release or Disposition of any Notes Priority Collateral pursuant to the terms of the Term Documents or in accord-ance with the provisions of this Agreement, in each case upon five Business Days’ prior written notice to the ABL Revolving Collateral Agent, but without any consultation with or consent of the ABL Revolving Collateral Agent or any ABL Revolving Claimholder; provided, however that any Term Agent shall use commercially reasonable efforts to provide ten days’ prior written notice to the ABL Revolving Collateral Agent before any Disposition by such Term Agent by public auction, private sale or a “store closing,” “going out of business” or similar sale, whether in bulk, in lots or any other Disposition of such Collateral not in the ordinary course of Grantor’s business.
(d) If, in connection with the Exercise of Secured Creditor Remedies by any Term Agent, including any Default Disposition of the Notes Priority Collateral, as provided for in Section 3, irrespective of whether an ABL Revolving Default or a Term Default has occurred and is continuing, any Term Agent releases any of its Liens on any part of the Notes Priority Collateral, then the Liens of the ABL Revolving Collateral Agent on such Notes Priority Collateral shall be automatically, unconditional-ly, and simultaneously released and terminated; provided, however, that any proceeds remaining after the Discharge of Term Obligations shall continue to be subject to the Liens of the ABL Revolving Claim-holders. The ABL Revolving Collateral Agent, for itself or on behalf of any such ABL Revolving Claim-holders, promptly shall execute and deliver to the Term Agents such termination or amendment state-ments, releases, and other documents provided to it as any Term Agent may reasonably request to effec-tively confirm such release, at the cost and expense of the Notes Issuer and without the consent or direc-tion of any other ABL Revolving Claimholders.
(e) If, in connection with any Disposition of any ABL Revolving Priority Collateral permitted under the terms of the ABL Revolving Loan Documents and not expressly prohibited under the
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terms of the Term Documents, the ABL Revolving Collateral Agent, for itself or on behalf of any ABL Revolving Claimholders, releases any of its Liens on the portion of the ABL Revolving Priority Collateral that is the subject of such Disposition, other than (i) in connection with the Discharge of ABL Revolving Obligations, or (ii) after the occurrence and during the continuance of any Term Default, then the Liens of the Term Agents on such Collateral shall be automatically, unconditionally, and simultaneously released and terminated. Each Term Agent, for itself or on behalf of any such Term Claimholders, promptly shall execute and deliver to the ABL Revolving Collateral Agent such termination or amendment statements, releases, and other documents as the ABL Revolving Collateral Agent may request to effectively confirm such release, at the cost and expense of the Company and without the consent or direction of any other Term Claimholders.
(f) If, in connection with any Disposition of any Notes Priority Collateral permitted under the terms of the Term Documents and not expressly prohibited under the terms of the ABL Revolv-ing Loan Documents, any Term Agent, for itself or on behalf of any Term Claimholders, releases any of its Liens on the portion of the Notes Priority Collateral that is the subject of such Disposition, other than (i) in connection with the Discharge of Term Obligations, or (ii) after the occurrence and during the con-tinuance of any ABL Revolving Default, then the Liens of the ABL Revolving Collateral Agent on such Collateral shall be automatically, unconditionally, and simultaneously released and terminated. The ABL Revolving Collateral Agent, for itself or on behalf of any such ABL Revolving Claimholders, promptly shall execute and deliver to the Term Agents such termination or amendment statements, releases, and other documents as any Term Agent may request to effectively confirm such release, at the cost and ex-pense of the Company and without the consent or direction of any other ABL Revolving Claimholders.
5.2. Insurance.
(a) Unless and until written notice of the occurrence of the Discharge of ABL Re-volving Obligations has been delivered to each Term Agent by the ABL Revolving Collateral Agent: (i) the ABL Revolving Collateral Agent and the ABL Revolving Claimholders shall have the sole and exclu-sive right, subject to the rights of the Grantors under the ABL Revolving Loan Documents, to adjust and settle any claim under any insurance policy covering or constituting the ABL Revolving Priority Collat-eral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the ABL Revolving Priority Collateral; and (ii) all proceeds of any such insurance policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect of ABL Revolving Priority Collateral, shall be paid, subject to the rights of the Grantors under the ABL Revolving Loan Documents, first, to the ABL Revolving Claim-holders, until the Discharge of ABL Revolving Obligations, second, to the Term Claimholders, until the Discharge of Term Obligations, and third, to the owner of the subject property, such other person as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct.
(b) Unless and until written notice of the occurrence of the Discharge of Term Obli-gations has been delivered to the ABL Revolving Collateral Agent by the Term Agents: (i) any Term Agent and the Term Claimholders shall have the sole and exclusive right, subject to the rights of the Grantors under the Term Documents, to adjust and settle any claim under any insurance policy covering or constituting the Notes Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Notes Priority Collateral; and (ii) all proceeds of any such insurance policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect of Notes Priority Collateral, shall be paid, subject to the rights of Grantors under the Term Documents, first, to Term Claimholders, until the Discharge of Term Obligations, second, to the ABL Revolving Claimholders, until the Discharge of
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ABL Revolving Obligations, and third, to the owner of the subject property, such other person as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct.
Notwithstanding anything contained in this Agreement to the contrary, in the event that any pro-ceeds are derived from any insurance policy that covers or constitutes both ABL Revolving Priority Col-lateral and Notes Priority Collateral where the allocation of proceeds is not stipulated between ABL Re-volving Priority Collateral and Notes Priority Collateral, then the ABL Revolving Collateral Agent and the First Lien Credit Facility Agent with the cooperation of the Notes Collateral Agent will work in good faith, subject to the rights of the Grantors under the ABL Revolving Loan Documents and Term Docu-ments, to collect, adjust or settle any claim under the relevant insurance policy.
(c) To effectuate the foregoing, and to the extent that the pertinent insurance compa-ny agrees to issue such endorsements, the Company shall provide the ABL Revolving Collateral Agent and each Term Agent with separate lender’s loss payable endorsements naming themselves as loss payee and additional insured, as their interests may appear, with respect to policies which insure Collateral hereunder.
5.3. Amendments; Refinancings.
(a) The ABL Revolving Loan Documents may be amended, restated, amended and restated, supplemented, or otherwise modified in accordance with their terms (or replaced in connection with a Refinancing of the ABL Revolving Obligations (or portions thereof)) and the ABL Revolving Ob-ligations may be Refinanced, in each case without notice to, or the consent of, any Term Agent or the Term Claimholders (except to the extent a consent is otherwise required to permit the Refinancing under the Term Documents), all without affecting the lien subordination or other provisions of this Agreement; provided, however, that, in the case of a Refinancing, the holders of such Refinancing debt (or an author-ized agent or trustee on their behalf) bind themselves (in a writing addressed to the Term Agents for the benefit of itself and the Term Claimholders) to the terms of this Agreement pursuant to such documents or agreements (including amendments or supplements to this Agreement) as the ABL Revolving Collat-eral Agent or any Term Agent, as the case may be, shall reasonably request; provided further, however, that, if such Refinancing debt is secured by a Lien on any Collateral the holders of such Refinancing debt shall be deemed bound by the terms hereof regardless of whether or not such writing is provided. For the avoidance of doubt, the sale or other transfer of indebtedness is not restricted by this Agreement but the provisions of this Agreement shall be binding on all holders of the ABL Revolving Obligations and the Term Obligations.
(b) The Term Documents may be amended, restated, amended and restated, supple-mented, or otherwise modified in accordance with their terms (or replaced in connection with a Refinanc-ing of the Term Obligations (or portions thereof)) and the Term Obligations may be Refinanced, in each case without notice to, or the consent of, the ABL Revolving Collateral Agent or the ABL Revolving Claimholders (except to the extent a consent is otherwise required to permit the Refinancing under the ABL Revolving Loan Documents), all without affecting the lien subordination or other provisions of this Agreement; provided, however, that, in the case of a Refinancing, the holders of such Refinancing debt (or an authorized agent or trustee on their behalf) bind themselves (in a writing addressed to the ABL Re-volving Collateral Agent for the benefit of itself and the ABL Revolving Claimholders) to the terms of this Agreement pursuant to such documents or agreements (including amendments or supplements to this Agreement) as the ABL Revolving Collateral Agent or any Term Agent, as the case may be, shall reason-ably request; provided further, however, that, if such Refinancing debt is secured by a Lien on any Collat-eral the holders of such Refinancing debt shall be deemed bound by the terms hereof regardless of wheth-er or not such writing is provided. For the avoidance of doubt, the sale or other transfer of indebtedness is
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not restricted by this Agreement but the provisions of this Agreement shall be binding on all holders of the ABL Revolving Obligations and the Term Obligations.
(c) So long as the Discharge of ABL Revolving Obligations has not occurred, each Notes Collateral Document shall include the following language (or similar language acceptable to the ABL Revolving Collateral Agent): “Notwithstanding anything herein to the contrary, the liens and securi-ty interests granted to [ ], as [ ] Collateral Agent, pursuant to this Agreement and the exercise of any right or remedy by [ ], as [ ] Collateral Agent hereunder, are subject to the provisions of the Intercred-itor Agreement, dated as of [ ] (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among [ ], as ABL Revolving Collateral Agent, The Bank of New York Mellon, as Notes U.S. Collateral Agent, BNY Trust Company of Canada, as Notes Canadian Collateral Agent, [[ ], as First Lien Credit Facility Agent,] and the Grantors (as de-fined in the Intercreditor Agreement) from time to time party thereto. In the event of any conflict be-tween the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Inter-creditor Agreement shall govern and control.”
(d) So long as the Discharge of Term Obligations has not occurred, each ABL Re-volving Collateral Document shall include the following language (or similar language acceptable to the Term Agents): “Notwithstanding anything herein to the contrary, the liens and security interests granted to the ABL Revolving Collateral Agent pursuant to this Agreement and the exercise of any right or reme-dy by the ABL Revolving Collateral Agent hereunder, are subject to the provisions of the Intercreditor Agreement, dated as of [ ] (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among [ ] as ABL Revolving Collateral Agent, The Bank of New York Mellon, as Notes U.S. Collateral Agent, BNY Trust Company of Canada, as Notes Canadian Collateral Agent, [[ ], as First Lien Credit Facility Agent,] and the Grantors (as defined in the Intercreditor Agreement) from time to time party thereto. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern and control.”
(e) In connection with any Refinancing or replacement contemplated by this Sec-tion 5.3, this Agreement shall be amended at the written request and sole expense of the Company (sub-ject to the provisions of clauses (a) and (b) above in this Section 5.3), and without the consent of the ABL Revolving Collateral Agent or any Term Agent, (i) to add parties (or any authorized agent or trustee therefor) providing any such Refinancing or replacement indebtedness, (ii) to establish that Liens on any Notes Priority Collateral securing the indebtedness being Refinanced or replaced shall have the same pri-ority as the Liens on any Notes Priority Collateral securing the Collateral being Refinanced or replaced, (iii) to establish that the Liens on any ABL Revolving Priority Collateral securing such Refinancing or replacement indebtedness shall have the same priority as the Liens on any ABL Revolving Priority Col-lateral securing the indebtedness being Refinanced or replaced, all on the terms provided for herein im-mediately prior to such Refinancing or replacement and (iv) to facilitate the inclusion of Pari Passu Lien Indebtedness without any further action by any other party thereto to the extent such Pari Passu Lien In-debtedness is permitted to be incurred under the ABL Revolving Credit Agreement and the Indenture.
5.4. Bailee for Perfection.
(a) The ABL Revolving Collateral Agent and each Term Agent each agree to hold or control that part of the Collateral that is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC, the PPSA or other applicable law (such Collateral, which shall include, without limitation, de-posit accounts subject to deposit account control agreements, being referred to as the “Pledged Collat-
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eral”), as gratuitous bailee and as a nonfiduciary agent for the benefit and on behalf of each Term Agent or the ABL Revolving Collateral Agent, as applicable (such bailment and agency being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2), 9-313(c), 9-104, 9-105, 9-106, and 9-107 of the UCC and applicable provisions of the PPSA), solely for the purpose of perfecting the security in-terest granted under the Term Documents or the ABL Revolving Loan Documents, as applicable, subject to the terms and conditions of this Section 5.4. Each Term Agent and the Term Claimholders hereby ap-point the ABL Revolving Collateral Agent as their gratuitous bailee for the purposes of perfecting their security interest in all Pledged Collateral in which the ABL Revolving Collateral Agent has a perfected security interest under the PPSA or the UCC. The ABL Revolving Collateral Agent and the ABL Re-volving Claimholders hereby appoint the Term Agents as their gratuitous bailee for the purposes of per-fecting their security interest in all Pledged Collateral in which the Term Agents have a perfected security interest under the PPSA or the UCC. Each of the ABL Revolving Collateral Agent and each Term Agent hereby accept such appointments pursuant to this Section 5.4(a) and acknowledge and agree that it shall act for the benefit of and on behalf of the other Agents with respect to any Pledged Collateral and that any proceeds received by the ABL Revolving Collateral Agent or any Term Agent, as the case may be, under any Pledged Collateral shall be applied in accordance with Section 4. Unless and until the Discharge of ABL Revolving Obligations as notified to each Term Agent in writing, each Term Agent agrees to promptly notify the ABL Revolving Collateral Agent of any Pledged Collateral constituting ABL Revolv-ing Priority Collateral held by it or actually known by it to be held by any other Term Claimholders, and, immediately upon the request of the ABL Revolving Collateral Agent at any time prior to the Discharge of ABL Revolving Obligations, each Term Agent agrees to deliver to the ABL Revolving Collateral Agent any such Pledged Collateral held by it or by any Term Claimholders, together with any necessary endorsements (or otherwise allow the ABL Revolving Collateral Agent to obtain control of such Pledged Collateral). Unless and until the Discharge of Term Obligations, the ABL Revolving Collateral Agent agrees to promptly notify each Term Agent of any Pledged Collateral constituting Notes Priority Collat-eral held by it or actually known by it to be held by any other ABL Revolving Claimholders, and, imme-diately upon the request of any Term Agent at any time prior to the Discharge of Term Obligations, the ABL Revolving Collateral Agent agrees to deliver to the Term Agents any such Pledged Collateral held by it or by any ABL Revolving Claimholders, together with any necessary endorsements (or otherwise allow the Term Agents to obtain control of such Pledged Collateral).
(b) The ABL Revolving Collateral Agent shall have no obligation whatsoever to any Term Agent or any Term Claimholder to ensure that the Pledged Collateral is genuine or owned by any of Grantors or to preserve rights or benefits of any person except as expressly set forth in this Section 5.4. Any Term Agent shall have no obligation whatsoever to the ABL Revolving Collateral Agent or any ABL Revolving Claimholder to ensure that the Pledged Collateral is genuine or owned by any of Gran-tors or to preserve rights or benefits of any person except as expressly set forth in this Section 5.4. The duties or responsibilities of the ABL Revolving Collateral Agent under this Section 5.4 shall be limited solely to holding or controlling the Pledged Collateral as bailee and agent in accordance with this Sec-tion 5.4 and delivering the Pledged Collateral upon a Discharge of ABL Revolving Obligations as provid-ed in paragraph (d) of this Section 5.4. The duties or responsibilities of each Term Agent under this Sec-tion 5.4 shall be limited solely to holding or controlling the Pledged Collateral as bailee and agent in ac-cordance with this Section 5.4 and delivering the Pledged Collateral upon a Discharge of Term Obliga-tions as provided in paragraph (e) of this Section 5.4.
(c) The ABL Revolving Collateral Agent acting pursuant to this Section 5.4 shall not have by reason of the ABL Revolving Collateral Documents, the Term Collateral Documents, or this Agreement a fiduciary relationship in respect of any Term Agent or any Term Claimholder. Each Term Agent acting pursuant to this Section 5.4 shall not have by reason of the ABL Revolving Collateral Doc-
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uments, the Term Collateral Documents, or this Agreement a fiduciary relationship in respect of the ABL Revolving Collateral Agent or any ABL Revolving Claimholder.
(d) Upon the Discharge of ABL Revolving Obligations, as notified to the ABL Re-volving Collateral Agent in writing, the ABL Revolving Collateral Agent shall deliver the remaining Pledged Collateral (if any) together with any necessary endorsements, first, to the Applicable Term Agent to the extent Term Obligations remain outstanding as confirmed in writing by the Term Agents, and, to the extent that the Term Agents confirm no Term Obligations are outstanding, second, to the Company to the extent no ABL Revolving Obligations or Term Obligations that are secured by such Pledged Collat-eral remain outstanding (in each case, so as to allow such person to obtain possession or control of such Pledged Collateral). At such time, the ABL Revolving Collateral Agent further agrees to take all other action reasonably requested by any Term Agent at the sole cost and expense of the Company (including amending any outstanding control agreements) to enable such Term Agent to obtain a first priority securi-ty interest in the Collateral.
(e) Upon the Discharge of Term Obligations, as notified to each Term Agent in writ-ing, each Term Agent shall deliver the remaining Pledged Collateral (if any) together with any necessary endorsements, first, to the ABL Revolving Collateral Agent to the extent the ABL Revolving Obligations remain outstanding as confirmed in writing by the ABL Revolving Collateral Agent, and, to the extent that the ABL Revolving Collateral Agent confirms no ABL Revolving Obligations are outstanding, se-cond, to the Company to the extent no ABL Revolving Obligations or Term Obligations that are secured by such Pledged Collateral remain outstanding (in each case, so as to allow such person to obtain posses-sion or control of such Pledged Collateral), it being understood that no Term Agent shall be required to take any action whatsoever without written confirmation from the ABL Revolving Collateral Agent. At such time, each Term Agent further agrees to take all other action reasonably requested by the ABL Re-volving Collateral Agent at the sole cost and expense of the Company (including amending any outstand-ing control agreements) to enable the ABL Revolving Collateral Agent to obtain a first priority security interest in the Collateral.
5.5. When Discharge of Obligations Deemed to Not Have Occurred.
(a) If the ABL Revolving Borrowers (or any of them) enter into any Refinancing of the ABL Revolving Obligations that is intended to be secured by the ABL Revolving Priority Collateral on a first priority basis, then a Discharge of ABL Revolving Obligations shall be deemed not to have oc-curred for all purposes of this Agreement, and the obligations under such Refinancing of such ABL Re-volving Obligations shall be treated as ABL Revolving Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the ABL Revolving Collateral Agent under the ABL Revolving Loan Documents effecting such Refinancing shall be the ABL Revolving Collateral Agent for all purposes of this Agreement. The ABL Revolving Collateral Agent under such ABL Revolving Loan Documents shall agree (in a writing addressed to the Term Agents) to be bound by the terms of this Agreement.
(b) If the Notes Issuer enters into any Refinancing of the Term Obligations that is in-tended to be secured by the Notes Priority Collateral on a senior-priority basis, then a Discharge of Term Obligations shall be deemed not to have occurred for all purposes of this Agreement, and the obligations under such Refinancing of such Term Obligations shall be treated as Term Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the lender or investor or group of lenders or investors or any of their designees under the Term Documents effecting such Refinancing shall be the Term Agent for all purposes of this Agreement. The lender or investor or group of lenders or investors or any of their designees under such Term Documents
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shall agree (in a writing addressed to the ABL Revolving Collateral Agent) to be bound by the terms of this Agreement.
5.6. Injunctive Relief. Should any Claimholder in any way take, attempt to, or threaten to take any action contrary to terms of this Agreement with respect to the Collateral, or fail to take any ac-tion required by this Agreement, any Term Agent, the ABL Revolving Collateral Agent or any other Claimholder, as the case may be, may obtain relief against such Claimholder by injunction, specific per-formance, or other appropriate equitable relief, it being understood and agreed by each of the ABL Re-volving Collateral Agent, each Term Agent and each Claimholder that (a) non-breaching Claimholders’ damages from such actions may at that time be difficult to ascertain and may be irreparable, and (b) each Claimholder waives any defense that such Grantor and/or other Claimholders can demonstrate damage and/or be made whole by the awarding of damages. The ABL Revolving Collateral Agent, each Term Agent and each Claimholder hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any ac-tion which may be brought by the ABL Revolving Collateral Agent or the ABL Revolving Claimholders or the Term Agents or the Term Claimholders, as the case may be.
SECTION 6. Insolvency Proceedings.
6.1. Enforceability and Continuing Priority. This Agreement shall be applicable both before and after the commencement of any Insolvency Proceeding and all converted or succeeding cases in re-spect thereof. The relative rights of Claimholders in or to any distributions from or in respect of any Col-lateral or proceeds of Collateral shall continue after the commencement of any Insolvency Proceeding. Accordingly, the provisions of this Agreement (including, without limitation, Section 2.1) are intended to be and shall be enforceable as a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code and applicable provisions of Bankruptcy Law. All references in this Agreement to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor in any Insolvency Proceeding. All references in this Agreement to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor in any Insolvency Proceeding.
6.2. Financing.
(a) Until the Discharge of ABL Revolving Obligations, if any Grantor shall be sub-ject to any Canadian Insolvency Proceeding or other Insolvency Proceeding and, if applicable, the ABL Revolving Collateral Agent shall consent to the use of cash collateral (as such term is defined in Section 363(a) of the Bankruptcy Code; herein, “Cash Collateral”) constituting ABL Revolving Priority Collat-eral, or to permit any Grantor to obtain financing to be provided by any one or more ABL Revolving Claimholders or other Persons under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law or in any Canadian Insolvency Proceeding secured by a Lien on the Collateral that is (i) senior or pari passu with the Liens on the ABL Revolving Priority Collateral securing the ABL Revolving Obligations and (ii) junior to the Liens on the Notes Priority Collateral securing the Term Obligations (such financing, a “ABL DIP Financing”), and if the relevant Grantor(s) desire to use such Cash Collateral or to obtain such ABL DIP Financing, then each Term Agent agrees and each Term Claimholder agrees by its ac-ceptance of the benefits of the Notes, indebtedness under the First Lien Credit Facility or Pari Passu Lien Indebtedness, as applicable, that it will be deemed to have consented, will raise no objection to, nor sup-port any other Person objecting to, the use of such Cash Collateral or to such ABL DIP Financing (includ-ing, except to the extent provided in Section 6.5, any objection based on an assertion that the Term Claimholders are entitled to adequate protection of their interest in the Collateral as a condition thereto), and each Term Agent will subordinate its Liens upon the ABL Revolving Priority Collateral to the Liens securing such ABL DIP Financing (and all obligations relating thereto, including any “carve-out” in favor
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of, or Lien in respect of, of fees and expenses of professionals as agreed to by ABL Revolving Collateral Agent and the ABL Revolving Claimholders with respect to ABL Revolving Priority Collateral) to the extent any Liens securing the ABL Revolving Obligations are discharged, subordinated to, or made pari passu with any new Liens securing such ABL DIP Financing and to any replacement or additional Liens granted as adequate protection of the interests of the holders of the ABL Revolving Obligations in the Collateral (“ABL Adequate Protection Lien”), in each case to the extent consistent with the other provi-sions of this Agreement; provided that (a) each Term Agent retains its Lien on the Collateral to secure the Term Obligations (in each case, including proceeds thereof arising after the commencement of such In-solvency Proceeding) and, as to the Notes Priority Collateral only, such Lien has the same priority as ex-isted prior to the commencement of such Insolvency Proceeding and any Lien on the Notes Priority Col-lateral securing such ABL DIP Financing and any ABL Adequate Protection Lien on the Notes Priority Collateral (and all obligations relating thereto, including any “carve-out” in favor of, or Lien in respect of, of fees and expenses of professionals retained by any debtor or creditors’ committee as agreed to by ABL Agent and the ABL Revolving Claimholders with respect to ABL Collateral) is junior and subordinate to the Lien of each Term Agent on the Notes Priority Collateral, (b) all Liens on ABL Revolving Priority Collateral securing any such ABL DIP Financing shall be senior to or on a parity with the Liens of ABL Revolving Collateral Agent and the ABL Revolving Claimholders securing the ABL Revolving Obliga-tions on ABL Revolving Priority Collateral and (c) to the extent that ABL Revolving Collateral Agent is granted an ABL Adequate Protection Lien on Collateral arising after the commencement of such Insol-vency Proceeding or additional payments or claims, the Term Claimholders are granted a Lien on such additional or replacement Collateral with the relative priority set forth in this Agreement (and no ABL Revolving Collateral Agent or ABL Revolving Claimholder shall oppose any motion by any Term Claimholder with respect to the granting of such a Lien). The ABL Revolving Collateral Agent, on be-half of itself and the ABL Revolving Claimholders, agrees that no such person shall provide to any Gran-tor any financing under Section 364 of the Bankruptcy Code to the extent that the ABL Revolving Collat-eral Agent or any ABL Revolving Claimholder would, in connection with such financing, be granted a Lien on the Notes Priority Collateral senior to or pari passu with any Liens of either Term Agent. The foregoing provisions of this Section 6.2(a) shall not prevent the Term Agents from objecting to any provi-sion in any Cash Collateral order or ABL DIP Financing documentation relating to any provision or con-tent of a plan of reorganization.
(b) Until the Discharge of Term Obligations, if any Grantor shall be subject to any Canadian Insolvency Proceeding or other Insolvency Proceeding and, if applicable, the Applicable Term Agent shall consent to the use of Cash Collateral constituting Notes Priority Collateral, or to permit any Grantor to obtain financing to be provided by any one or more Term Claimholders or other Persons under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law or in any Canadian Insolvency Pro-ceeding secured by a Lien on the Collateral that is (i) senior or pari passu with the Liens on the Notes Pri-ority Collateral securing the Term Obligations and (ii) junior to the Liens on the ABL Revolving Priority Collateral securing the ABL Revolving Obligations (such financing, a “Term DIP Financing”), and if the relevant Grantor(s) desire to obtain authorization from the applicable Bankruptcy Court to use such Cash Collateral or to obtain such Term DIP Financing, then the ABL Revolving Collateral Agent agrees and each ABL Revolving Claimholder agrees by its acceptance of the benefits of the ABL Revolving Obliga-tions, that it will be deemed to have consented, will raise no objection to, nor support any other Person objecting to, the use of such Cash Collateral or to such Term DIP Financing (including, except to the ex-tent provided in Section 6.5, any objection based on an assertion that the ABL Revolving Claimholders are entitled to adequate protection of their interest in the Collateral as a condition thereto), and the ABL Revolving Collateral Agent will subordinate its Liens upon the Notes Priority Collateral to the Liens se-curing such Term DIP Financing (and all obligations relating thereto, including any “carve-out” in favor of , or Lien in respect of, of fees and expenses of professionals retained by any debtor or creditors’ com-mittee as agreed to by the Applicable Term Agent and the Term Claimholders with respect to Notes Prior-
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ity Collateral) to the extent any Liens securing the Term Obligations are discharged, subordinated to, or made pari passu with any new Liens securing such Term DIP Financing and to any replacement or addi-tional Liens granted as adequate protection of the interests of the holders of the Term Obligations in the Collateral (“Term Adequate Protection Lien”), in each case to the extent consistent with the other provi-sions of this Agreement; provided that (a) the ABL Revolving Collateral Agent retains its Lien on the Collateral to secure the ABL Revolving Obligations (in each case, including proceeds thereof arising after the commencement of such Insolvency Proceeding) and, as to the ABL Revolving Priority Collateral on-ly, such Lien has the same priority as existed prior to the commencement of such Insolvency Proceeding and any Lien on the ABL Revolving Priority Collateral securing such Term DIP Financing and any Term Adequate Protection Lien on the ABL Revolving Priority Collateral (and all obligations relating thereto, including any “carve-out” in favor of, or Lien in respect of, of fees and expenses of professionals retained by any debtor or creditors’ committee as agreed to by the Applicable Term Agent and the Term Claim-holders with respect to ABL Collateral) is junior and subordinate to the Lien of the ABL Revolving Col-lateral Agent on the ABL Revolving Priority Collateral, (b) all Liens on Notes Priority Collateral securing any such Term DIP Financing shall be senior to or on a parity with the Liens of the Term Agents and the Term Claimholders securing the Term Obligations on Notes Priority Collateral and (c) to the extent that the Applicable Term Agent is granted a Term Adequate Protection Lien on Collateral arising after the commencement of such Insolvency Proceeding or additional payments or claims, the ABL Revolving Claimholders are granted a Lien on such additional or replacement Collateral with the relative priority set forth in this Agreement (and no Term Agent or Term Claimholder shall oppose any motion by any ABL Revolving Claimholder with respect to the granting of such a Lien). Each Term Agent, on behalf of itself and the Term Claimholders, agrees that no such person shall provide to any Grantor any financing under Section 364 of the Bankruptcy Code to the extent that the any Term Agent or any Term Claimholder would, in connection with such financing, be granted a Lien on the ABL Revolving Priority Collateral senior to or pari passu with any Liens of the ABL Revolving Collateral Agent. The foregoing provisions of this Section 6.2(b) shall not prevent the ABL Revolving Collateral Agent from objecting to any provi-sion in any Cash Collateral order or Term DIP Financing documentation relating to any provision or con-tent of a plan of reorganization.
(c) All Liens granted to the ABL Revolving Collateral Agent or any Term Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended by the parties to be and shall be deemed to be subject to the Lien priorities in Section 2.1 and the other terms and conditions of this Agreement. Nothing contained herein shall be deemed to limit the rights of any Term Agent, on behalf of itself and the Term Claimholders, to object to (I) any Term DIP Financing for which the rele-vant Grantor(s) desire to obtain authorization from the applicable Bankruptcy Court that has not been consented to by the applicable Term Agent and the Term Claimholders or (ii) any ABL DIP Financing for which the relevant Grantor(s) desire to obtain authorization from the applicable Bankruptcy Court that has not been consented to by the applicable ABL Revolving Collateral Agent and the ABL Revolving Claim-holders; any such objection may be on any grounds, including the failure to provide “adequate protection” for the Liens of the Term Agents or the Term Claimholders. Nothing contained herein shall be deemed to limit the rights of any ABL Revolving Collateral Agent, on behalf of itself and the ABL Revolving Claimholders, to object to (I) any ABL DIP Financing for which the relevant Grantor(s) desire to obtain authorization from the applicable Bankruptcy Court that has not been consented to by the applicable ABL Revolving Collateral Agent and the ABL Revolving Claimholders or (II) any Term DIP Financing for which the relevant Grantor(s) desire to obtain authorization from the applicable Bankruptcy Court that has not been consented to by the applicable Term Agent and the Term Claimholders; any such objection may be on any grounds, including the failure to provide “adequate protection” for the Liens of the ABL Re-volving Collateral Agent or the ABL Revolving Claimholders.
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6.3. Sales. Subject to Section 3.4(a) and Section 3.9, each of the ABL Revolving Collateral Agent and each Term Agent will consent, and will not object to or oppose a sale or motion to Dispose of any Priority Collateral (including bidding and other procedures in respect of such Disposition) of the oth-er party free and clear of any Liens or other claims in favor of such other party under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code or other applicable law or under appli-cable Canadian Insolvency Proceedings or other Insolvency Proceedings if the requisite ABL Revolving Claimholders under the ABL Revolving Credit Agreement or the requisite Term Claimholders under the Notes Documents or the First Lien Credit Facility, as the case may be, have consented to such sale or Disposition of their respective Priority Collateral, so long as the terms of any proposed order approving such transaction provide for the Liens of the respective Claimholders on such Priority Collateral attach to the proceeds thereof subject to the relative Lien priorities set forth in Section 2.1 and the other terms and conditions of this Agreement. Nothing in this Agreement shall impair the rights of any party to credit bid under applicable Bankruptcy Law (including Section 363(k) of the Bankruptcy Code, if applicable) or pursuant to this Agreement (so long as the right of Term Claimholders to offset its claim against the pur-chase price for any ABL Revolving Priority Collateral exists only after the Discharge of ABL Revolving Obligations, and so long as the right of ABL Revolving Claimholders to offset its claim against the pur-chase price for any Notes Priority Collateral exists only after the Discharge of Term Obligations).
6.4. Relief from the Automatic Stay.
(a) Until the Discharge of ABL Revolving Obligations has occurred, each Term Agent will not seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of the ABL Revolving Priority Collateral, without the prior writ-ten consent of the ABL Revolving Collateral Agent, except to the extent the ABL Revolving Collateral Agent has received relief from such stay in respect of the ABL Revolving Priority Collateral or (b) object (or support any other person objecting) to any motion for relief from the automatic stay or from any in-junction against foreclosure or enforcement in respect of the ABL Revolving Priority Collateral made by ABL Revolving Collateral Agent or any ABL Revolving Claimholder.
(b) Until the Discharge of Term Obligations has occurred, the ABL Revolving Col-lateral Agent will not seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of the Notes Priority Collateral, without the prior writ-ten consent of the Term Agents, except to the extent the Term Agents have received relief from such stay in respect of the Notes Priority Collateral or (b) object (or support any other person objecting) to any mo-tion for relief from the automatic stay or from any injunction against foreclosure or enforcement in re-spect of the Notes Priority Collateral made any Term Agent or any Term Claimholder.
6.5. Adequate Protection.
(a) None of the Term Agents or Term Claimholders shall oppose (or support the op-position of any other Person to) in any Insolvency Proceeding under the Bankruptcy Code involving any Grantor (i) any motion or other request by the ABL Revolving Collateral Agent or ABL Revolving Claimholders for adequate protection of the ABL Revolving Collateral Agent’s Liens upon the ABL Re-volving Priority Collateral, including any claim of the ABL Revolving Collateral Agent or ABL Revolv-ing Claimholders to post-petition interest, fees or expenses or otherwise as a result of their Lien on the ABL Revolving Priority Collateral (so long as any post-petition interest, fees or expenses paid as a result thereof is not paid from the proceeds of Notes Priority Collateral or from advances of any Term DIP Fi-nancing to be secured by the Notes Priority Collateral), request for adequate protection for the application of proceeds of ABL Revolving Priority Collateral to the ABL Revolving Obligations, and request for re-placement or additional Liens on post-petition assets of the same type as the ABL Revolving Priority Col-
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lateral or a superpriority administrative claim, or (ii) any objection by the ABL Revolving Collateral Agent or ABL Revolving Claimholders to any motion, relief, action or proceeding based on the ABL Re-volving Collateral Agent or the ABL Revolving Claimholders claiming a lack of adequate protection with respect to their Liens in the ABL Revolving Priority Collateral. In addition under the Bankruptcy Code, the ABL Revolving Collateral Agent, for itself and on behalf of the ABL Revolving Claimholders, may seek adequate protection of its junior interest in the Notes Priority Collateral, subject to the provisions of this Agreement; provided that each Term Agent is granted adequate protection in the form of a senior re-placement or additional Lien on post-petition assets of the same type as the Notes Priority Collateral and/or a senior superpriority administrative claim (as applicable). Such Lien on post-petition assets of the same type as the Notes Priority Collateral and/or a superpriority administrative claim (as applicable), if granted to the ABL Revolving Collateral Agent, will be subordinated to the adequate protection Liens granted in favor of the Term Agents on such post-petition assets and/or a superpriority administrative claim granted in favor of the Term Agents, and, if applicable, to the Term DIP Financing Liens of the Term Agents or the Term Claimholders on such post-petition assets of the same type as the Notes Priority Collateral. If the ABL Revolving Collateral Agent, for itself and on behalf of the ABL Revolving Claim-holders, seeks or requires (or is otherwise granted) adequate protection of its junior interest in the Notes Priority Collateral in the form of a replacement or additional Lien on the post-petition assets of the same type as the Notes Priority Collateral and/or a superpriority administrative claim, then the ABL Revolving Collateral Agent, for itself and the ABL Revolving Claimholders, agrees that each Term Agent shall also be granted a replacement or additional Lien on such post-petition assets as adequate protection of its sen-ior interest in the Notes Priority Collateral and/or a superpriority administrative claim and that the ABL Revolving Collateral Agent’s replacement or additional Lien and/or superpriority administrative claim (as applicable) shall be subordinated to the replacement or additional Lien and/or superpriority administrative claim of the Term Agent on the same basis as the Liens of the ABL Revolving Collateral Agent on the Notes Priority Collateral are subordinated to the Liens of the Term Agents on the Notes Priority Collateral under this Agreement; in that regard, the ABL Revolving Collateral Agent, for itself and the ABL Re-volving Claimholders, further agrees that it will not accept any such replacement or additional Liens on such post-petition assets of the same type as the Notes Priority Collateral and/or a superpriority adminis-trative claim unless each Term Agent shall also have received a replacement or additional Lien thereon and/or a superpriority administrative claim as adequate protection of its senior interest in the Notes Priori-ty Collateral that is superior to the additional or replacement Liens and/or a superpriority administrative claim (as applicable) so granted to the ABL Revolving Collateral Agent. If the ABL Revolving Collateral Agent or any ABL Revolving Claimholder receives as adequate protection a Lien on post-petition assets of the same type as the ABL Revolving Priority Collateral, then such post-petition assets shall also consti-tute ABL Revolving Priority Collateral to the extent of any allowed claim of the ABL Revolving Collat-eral Agent and the ABL Revolving Claimholders secured by such adequate protection Lien and shall be subject to this Agreement.
(b) None of the ABL Revolving Collateral Agent or ABL Revolving Claimholders shall oppose (or support the opposition of any other Person to) in any Insolvency Proceeding under the Bankruptcy Code involving any Grantor (i) any motion or other request by any Term Agent or Term Claimholders for adequate protection of such Term Agent’s Liens upon the Notes Priority Collateral, in-cluding any claim of such Term Agent or the Term Claimholders to post-petition interest, fees or expens-es or otherwise as a result of their Lien on the Notes Priority Collateral (so long as any post-petition inter-est, fees or expenses paid as a result thereof is not paid from the proceeds of ABL Revolving Priority Col-lateral or from advances of any ABL DIP Financing to be secured by the ABL Revolving Priority Collat-eral), request for adequate protection for the application of proceeds of Notes Priority Collateral to the Term Obligations, and request for replacement or additional Liens on post-petition assets of the same type as the Notes Priority Collateral or a superpriority administrative claim, or (ii) any objection by any Term Agent or the Term Claimholders to any motion, relief, action or proceeding based on the such Term
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Agent or the Term Claimholders claiming a lack of adequate protection with respect to their Liens in the Notes Priority Collateral. In addition under the Bankruptcy Code, each Term Agent, for itself and on be-half of the Term Claimholders, may seek adequate protection of its junior interest in the ABL Revolving Priority Collateral, subject to the provisions of this Agreement; provided that the ABL Revolving Collat-eral Agent is granted adequate protection in the form of a senior replacement or additional Lien on post-petition assets of the same type as the ABL Revolving Priority Collateral and/or a senior superpriority administrative claim (as applicable). Such Lien on post-petition assets of the same type as the ABL Re-volving Priority Collateral and/or a superpriority administrative claim (as applicable), if granted to the such Term Agent, will be subordinated to the adequate protection Liens granted in favor of the ABL Re-volving Collateral Agent on such post-petition assets and/or a superpriority administrative claim granted in favor of the ABL Revolving Collateral Agent, and, if applicable, to the ABL DIP Financing Liens of the ABL Revolving Collateral Agent or the ABL Revolving Claimholders on such post-petition assets of the same type as the ABL Revolving Priority Collateral. If such Term Agent, for itself and on behalf of the Term Claimholders, seeks or requires (or is otherwise granted) adequate protection of its junior inter-est in the ABL Revolving Priority Collateral in the form of a replacement or additional Lien on the post-petition assets of the same type as the ABL Revolving Priority Collateral and/or a superpriority adminis-trative claim, then such Term Agent, for itself and the Term Claimholders, agrees that the ABL Revolving Collateral Agent shall also be granted a replacement or additional Lien on such post-petition assets as ad-equate protection of its senior interest in the ABL Revolving Priority Collateral and/or a superpriority administrative claim and that such Term Agent’s replacement or additional Lien and/or superpriority ad-ministrative claim (as applicable) shall be subordinated to the replacement or additional Lien and/or su-perpriority administrative claim of the ABL Revolving Collateral Agent on the same basis as the Liens of such Term Agent on the ABL Revolving Priority Collateral are subordinated to the Liens of the ABL Re-volving Collateral Agent on the ABL Revolving Priority Collateral under this Agreement; in that regard, such Term Agent, for itself and the Term Claimholders, further agrees that it will not accept any such re-placement or additional Liens on such post-petition assets of the same type as the ABL Revolving Priority Collateral and/or a superpriority administrative claim unless the ABL Revolving Collateral Agent shall also have received a replacement or additional Lien thereon and/or a superpriority administrative claim as adequate protection of its senior interest in the ABL Revolving Priority Collateral that is superior to the additional or replacement Liens and/or a superpriority administrative claim (as applicable) so granted to such Term Agent. If such Term Agent or any Term Claimholder receives as adequate protection a Lien on post-petition assets of the same type as the Notes Priority Collateral, then such post-petition assets shall also constitute Notes Priority Collateral to the extent of any allowed claim of the such Term Agent and the holders of Term Obligations secured by such adequate protection Lien and shall be subject to this Agreement.
(c) No Term Agent or any other Term Claimholder shall object to, oppose, or chal-lenge any claim by the ABL Revolving Collateral Agent or any ABL Revolving Claimholder for allow-ance in any Insolvency Proceeding of ABL Revolving Obligations consisting of post-petition interest, fees, or expenses.
(d) Neither the ABL Revolving Collateral Agent nor any other ABL Revolving Claimholder shall object to, oppose, or challenge any claim by any Term Agent or any Term Claimholder for allowance in any Insolvency Proceeding of Term Obligations consisting of post-petition interest, fees, or expenses.
6.6. Section 1111(b) of the Bankruptcy Code. In any Insolvency Proceeding under the Bank-ruptcy Code involving a Grantor, none of the Term Agents or the ABL Revolving Collateral Agent shall object to, oppose, support any objection, or take any other action to impede, the right of the other to make an election under Section 1111(b)(2) of the Bankruptcy Code. So long as the respective rights and reme-
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dies available to any Term Agent and the ABL Revolving Collateral Agent hereunder are not impaired thereby, each of the ABL Revolving Collateral Agent and each Term Agent waives any claim it may hereafter have against any Claimholder arising out of the election by such Claimholder of the application of Section 1111(b)(2) of the Bankruptcy Code.
6.7. Avoidance Issues. If any Claimholder is required in any Insolvency Proceeding or oth-erwise to turn over, disgorge or otherwise pay to the estate of any Grantor any amount paid in respect of the ABL Revolving Obligations or the Term Obligations, as the case may be (a “Recovery”), then such Claimholders shall be entitled to a reinstatement of the ABL Revolving Obligations or the Term Obliga-tions, as applicable, with respect to all such recovered amounts, and all rights, interests, priorities and privileges recognized in this Agreement shall apply with respect to any such Recovery. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties hereto from such date of reinstatement.
6.8. Plan of Reorganization. If, in any Insolvency Proceeding involving a Grantor, debt obli-gations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are dis-tributed or reinstated (in whole or in part) pursuant to a plan of reorganization or similar dispositive re-structuring plan, both on account of the ABL Revolving Obligations and on account of the Term Obliga-tions, then, to the extent the debt obligations distributed on account of the ABL Revolving Obligations and on account of the Term Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
6.9. Separate Grants of Security and Separate Classification. The ABL Revolving Collateral Agent, on behalf of the ABL Revolving Claimholders, and each Term Agent, on behalf of the Term Claimholders, acknowledge that: the respective grants of Liens pursuant to the ABL Revolving Collateral Documents and the Term Collateral Documents constitute two separate and distinct grants of Liens, and because of, among other things, their differing rights in the Collateral, (i) the Term Obligations do not give rise to a commonality of interest and are fundamentally different from the ABL Revolving Obliga-tions and (ii) the ABL Revolving Obligations do not give rise to a commonality of interest and are fun-damentally different from the Term Obligations and, in each case, must be separately classified in any plan of reorganization proposed or confirmed (or approved) in an Insolvency Proceeding. To further ef-fectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Revolving Claimholders and the Term Claimholders in respect of the Collateral consti-tute claims in the same class (rather than at least two separate classes of secured claims with the priorities described in Section 2.1), then the ABL Revolving Claimholders and the Term Claimholders hereby acknowledge and agree that all distributions from the Collateral shall be made as if there were two sepa-rate classes of ABL Revolving Obligations and Term Obligations (with the effect being that, to the extent that (i) the aggregate value of the ABL Revolving Claimholders’ ABL Revolving Priority Collateral is sufficient (for this purpose ignoring all claims held by the Term Claimholders thereon), the ABL Revolv-ing Claimholders shall be entitled to receive, in addition to amounts distributed to them in respect of prin-cipal, pre-petition or pre-filing interest and other claims, all amounts owing in respect of post-petition or post-filing interest, fees or expenses that is available from their ABL Revolving Priority Collateral (re-gardless of whether any such claims may or may not be allowed or allowable in whole or in part as against the Grantor in the respective Insolvency Proceeding pursuant to Section 506(b) of the Bankruptcy Code or applicable law), before any distribution is made from the ABL Revolving Priority Collateral in respect of the Term Obligations with respect to such ABL Revolving Priority Collateral, with each Term Claimholder acknowledging and agreeing to turn over to the ABL Revolving Collateral Agent with re-spect to such ABL Revolving Priority Collateral amounts otherwise received or receivable by them from
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the ABL Revolving Priority Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries of the Term Obligations and (ii) the aggregate value of the Term Claimholders’ Notes Priority Collateral is sufficient (for this purpose ig-noring all claims held by the ABL Revolving Claimholders thereon), the Term Claimholders shall be enti-tled to receive, in addition to amounts distributed to them in respect of principal, pre-petition or pre-filing interest and other claims, all amounts owing in respect of post-petition or post-filing interest, fees or ex-penses that is available from their Notes Priority Collateral (regardless of whether any such claims may or may not be allowed or allowable in whole or in part as against the Grantor in the respective Insolvency Proceeding pursuant to Section 506(b) of the Bankruptcy Code or applicable law), before any distribution is made from the Notes Priority Collateral in respect of the ABL Revolving Obligations with respect to such Notes Priority Collateral, with each ABL Revolving Claimholder acknowledging and agreeing to turn over to the Term Agents with respect to such Notes Priority Collateral amounts otherwise received or receivable by them from the Notes Priority Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries of the ABL Re-volving Obligations).
SECTION 7. Reliance; Waivers; Etc.
7.1. Reliance. Other than any reliance on the terms of this Agreement, the ABL Revolving Collateral Agent, on behalf of the ABL Revolving Claimholders, acknowledges that it and such ABL Re-volving Claimholders have, independently and without reliance on any Term Agent or any Term Claim-holder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the ABL Revolving Loan Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the ABL Revolving Loan Documents or this Agreement. Other than any reliance on the terms of this Agreement, each Holder of Notes, Holder of Pari Passu Lien Indebtedness and each Holder of First Lien Obligations acknowledge that it has, independently and without reliance on the ABL Re-volving Collateral Agent, any Term Agent or any ABL Revolving Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the Term Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Term Documents or this Agreement.
7.2. No Warranties or Liability. The ABL Revolving Collateral Agent, on behalf of the ABL Revolving Claimholders, acknowledges and agrees that no Term Agent has made an express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, col-lectibility, or enforceability of any of the Term Documents, the ownership by any Grantor of any Collat-eral, or the perfection or priority of any Liens thereon. Except as otherwise expressly provided herein, the Term Agents and the Term Claimholders will be entitled to manage and supervise the Term Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. Each Term Agent, on behalf of the Term Claimholders, acknowledges and agrees that the ABL Revolving Collateral Agent and the ABL Revolving Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility, or enforceability of any of the ABL Revolving Loan Documents, the ownership of any Collateral, or the perfection or priority of any Liens thereon. Except as otherwise expressly provided herein, the ABL Revolving Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the ABL Revolving Loan Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. Except as expressly provided herein, each Term Agent and the Term Claimholders shall have no duty to the ABL Revolving Collateral Agent or any ABL Revolving Claimholders, and the ABL Revolving Collateral Agent and the ABL Revolving Claimholders shall have no duty to the any Term Agent and the Term Claimholders, to act or refrain from acting in a manner that allows, or results
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in, the occurrence or continuance of an “event of default” or “default” under any agreements with any Grantor (including the ABL Revolving Loan Documents and the Term Documents), regardless of any knowledge thereof which they may have or be charged with. The ABL Revolving Collateral Agent, on behalf of the ABL Revolving Claimholders, acknowledges and agrees that each Term Agent may, but shall have no obligation to, take all such actions it may determine necessary to perfect or continue the per-fection of the Term Claimholders’ junior-priority security interest in the ABL Revolving Priority Collat-eral and no Term Agent in any way shall be liable for any lapse of perfection or for maintaining perfec-tion. Each Term Agent, on behalf of the Term Claimholders, acknowledges and agrees that the ABL Re-volving Collateral Agent may, but shall have no obligation to, take all such actions it may determine nec-essary to perfect or continue the perfection of the ABL Revolving Claimholders’ junior-priority security interest in the Notes Priority Collateral and the ABL Revolving Collateral Agent shall not in any way be liable for any lapse of perfection or for maintaining perfection.
7.3. No Waiver of Lien Priorities.
(a) No right of the ABL Revolving Claimholders, the ABL Revolving Collateral Agent or any of them to enforce any provision of this Agreement or any ABL Revolving Loan Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Gran-tor or by any act or failure to act by any ABL Revolving Claimholder or the ABL Revolving Collateral Agent, or by any noncompliance by any person with the terms, provisions, and covenants of this Agree-ment, any of the ABL Revolving Loan Documents or any of the Term Documents, regardless of any knowledge thereof which the ABL Revolving Collateral Agent or the ABL Revolving Claimholders, or any of them, may have or be otherwise charged with. No right of the Term Claimholders, any Term Agent or any of them to enforce any provision of this Agreement or any Term Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act by any Term Claimholder or any Term Agent, or by any noncompliance by any person with the terms, provisions, and covenants of this Agreement, any of the Term Documents or any of the ABL Revolving Loan Documents, regardless of any knowledge thereof which any Term Agent or the Term Claimholders, or any of them, may have or be otherwise charged with.
(b) Subject to any rights of the Grantors under the ABL Revolving Loan Documents and the Term Documents and subject to the provisions of Section 5.3(a), the ABL Revolving Collateral Agent and the ABL Revolving Claimholders may, at any time and from time to time in accordance with the ABL Revolving Loan Documents and/or applicable law, without the consent of, or notice to, any Term Agent or any Term Claimholders, without incurring any liabilities to any Term Agent or any Term Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of any Term Agent or the Term Claimholders is affected, impaired, or extinguished thereby) do any one or more of the following without the prior written consent of any Term Agents or any Term Claimholders:
(i) change the manner, place, or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase, or alter, the terms of any of the ABL Revolving Obligations or any Lien on any Collateral or guarantee thereof or any li-ability of any Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the ABL Revolving Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify, or supplement in any manner any Liens held by the ABL Revolving Collateral Agent or any ABL Revolving Claimholders, the ABL Revolv-ing Obligations, or any of the ABL Revolving Loan Documents;
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(ii) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the ABL Revolving Priority Collateral or any liability of any Grantor to the ABL Revolving Claimholders or the ABL Revolving Collateral Agent, or any liability incurred directly or indirectly in respect thereof;
(iii) settle or compromise any ABL Revolving Obligation or any other liabil-ity of any Grantor or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including the ABL Revolving Obligations) in any manner or order that is not in-consistent with the terms of this Agreement; and
(iv) exercise or delay in or refrain from exercising any right or remedy against any Grantor or any other person, elect any remedy and otherwise deal freely with any Grantor or any ABL Revolving Priority Collateral and any security and any guaran-tor or any liability of any Grantor to any ABL Revolving Claimholders or any liability incurred directly or indirectly in respect thereof.
(c) Except as otherwise provided herein, the ABL Revolving Claimholders and the ABL Revolving Collateral Agent shall have no liability to any Term Agent and the Term Claimholders, and each Term Agent and the Term Claimholders hereby waive any claim against any ABL Revolving Claimholder or the ABL Revolving Collateral Agent, arising out of any and all actions which the ABL Revolving Claimholders or the ABL Revolving Collateral Agent may, pursuant to the terms hereof, take, permit or omit to take with respect to:
(i) the ABL Revolving Loan Documents;
(ii) the collection of the ABL Revolving Obligations; or
(iii) the foreclosure upon, or sale, liquidation, or other Disposition of, or the failure to foreclose upon, or sell, liquidate, or otherwise dispose of, any ABL Revolving Priority Collateral. Each Term Agent and the Term Claimholders agree that the ABL Revolving Claimholders and the ABL Revolving Collateral Agent have no duty to them in respect of the maintenance or preservation of the ABL Revolving Priority Collateral, the ABL Revolving Obligations, or otherwise.
(d) Subject to any rights of the Grantors under the Term Documents and subject to the provisions of Section 5.3(b), each Term Agent may, at any time and from time to time in accordance with the Term Documents and/or applicable law, without the consent of, or notice to, the ABL Revolving Collateral Agent or the ABL Revolving Claimholders, without incurring any liabilities to the ABL Re-volving Collateral Agent or the ABL Revolving Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of the ABL Revolving Collateral Agent or the ABL Revolving Claimholders is affected, im-paired, or extinguished thereby) do any one or more of the following without the prior written consent of the ABL Revolving Collateral Agent and the ABL Revolving Claimholders:
(i) change the manner, place, or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase, or alter, the terms of any of the Term Obligations or any Lien on any Collateral or guarantee thereof or any liability of any Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Term Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange,
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extend, modify, or supplement in any manner any Liens held by any Term Agent or any Term Claimholders, the Term Obligations, or any of the Term Documents;
(ii) subject to Section 3.9, sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Notes Pri-ority Collateral or any liability of any Grantor to the Term Claimholders or any Term Agent, or any liability incurred directly or indirectly in respect thereof;
(iii) settle or compromise any Term Obligation or any other liability of any Grantor or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including the Term Obligations) in any manner or order that is not inconsistent with this Agreement; and
(iv) exercise or delay in or refrain from exercising any right or remedy against any Grantor or any other person, elect any remedy and otherwise deal freely with any Grantor or any Notes Priority Collateral and any security and any guarantor or any li-ability of any Grantor to any Term Agent or any Term Claimholders or any liability in-curred directly or indirectly in respect thereof.
(e) Except as otherwise provided herein, each Term Agent and the Term Claimhold-ers shall have no liability to the ABL Revolving Claimholders and the ABL Revolving Collateral Agent, and the ABL Revolving Claimholders and the ABL Revolving Collateral Agent hereby waive any claim against any Term Agent and the Term Claimholders, arising out of any and all actions which any Term Agent and the Term Claimholders may, pursuant to the terms hereof, take, permit or omit to take with respect to:
(i) The Term Documents;
(ii) the collection of the Term Obligations; or
(iii) the foreclosure upon, or sale, liquidation, or other disposition of, or the failure to foreclose upon, or sell, liquidate, or otherwise dispose of, any Notes Priority Collateral. The ABL Revolving Claimholders and the ABL Revolving Collateral Agent agree that each Term Agent and the Term Claimholders have no duty to them in respect of the maintenance or preservation of the Notes Priority Collateral, the Term Obligations, or otherwise.
(f) Until the Discharge of ABL Revolving Obligations and the Discharge of Term Obligations, each of the ABL Revolving Collateral Agent and each Term Agent agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead, or otherwise assert, or otherwise claim the benefit of, any marshaling, appraisal, valuation, or other similar right that may otherwise be available under applicable law with respect to the other party’s Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
7.4. Obligations Unconditional. For so long as this Agreement is in full force and effect, all rights, interests, agreements and obligations of the ABL Revolving Collateral Agent and the ABL Re-volving Claimholders and each Term Agent and the Term Claimholders, respectively, hereunder shall remain in full force and effect irrespective of:
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(a) any lack of validity or enforceability of any ABL Revolving Loan Documents or any Term Documents;
(b) except as otherwise expressly restricted in this Agreement, any change in the time, manner, or place of payment of, or in any other teens of, all or any of the ABL Revolving Obligations or Term Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any ABL Revolving Loan Document or any Term Document;
(c) except as otherwise expressly restricted in this Agreement, any exchange of any security interest in any Collateral or any other collateral, or any amendment, waiver or other mod-ification, whether in writing or by course of conduct or otherwise, of all or any of the ABL Re-volving Obligations or Term Obligations or any guarantee thereof;
(d) the commencement of any Insolvency Proceeding in respect of any Grantor; or
(e) any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Grantor in respect of the ABL Revolving Collateral Agent, the ABL Re-volving Obligations, any ABL Revolving Claimholder, any Term Agent, any Term Claimholder, or the Term Obligations in respect of this Agreement.
SECTION 8. Representations and Warranties.
8.1. Representations and Warranties of Each Party. Each party hereto represents and warrants to the other parties hereto as follows:
(a) Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder.
(b) This Agreement has been duly executed and delivered by such party.
8.2. Representations and Warranties of Each Agent. The ABL Revolving Collateral Agent and each Term Agent each represents and warrants to the other that it has been authorized by ABL Re-volving Lenders, lenders under the First Lien Credit Facility or holders of Notes, as applicable, under the ABL Revolving Credit Agreement, the Indenture or the First Lien Credit Facility, as applicable, to enter into this Agreement.
SECTION 9. Miscellaneous.
9.1. Conflicts. Except to the extent expressly provided in Section 9.16, in the event of any conflict between the provisions of this Agreement and the provisions of any of the ABL Revolving Loan Documents or any of the Term Documents, the provisions of this Agreement shall govern and control.
9.2. Effectiveness; Continuing Nature of this Agreement; Severability. This Agreement shall become effective when executed and delivered by the parties hereto. This is a continuing agreement of lien subordination (as opposed to debt or claim subordination) and the ABL Revolving Claimholders may continue, at any time and without notice to any Term Agent or the Term Claimholders, to extend credit and other financial accommodations to or for the benefit of any Grantor constituting ABL Revolving Ob-ligations in reliance hereon. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency Proceeding. Consistent with, but not in limitation of, the preceding sen-
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tence, the ABL Revolving Collateral Agent and each Term Agent, on behalf of the applicable Claimhold-ers, irrevocably acknowledges that this Agreement constitutes a “subordination agreement” within the meaning of both New York law and Section 510(a) of the Bankruptcy Code. Any provision of this Agreement that is prohibited or unenforceable shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. All references to any Grantor shall include such Grantor as debt-or and debtor in possession and any receiver or trustee for such Grantor in any Insolvency Proceeding. This Agreement shall terminate and be of no further force and effect on the date that the Discharge of ABL Revolving Obligations or the Discharge of Term Obligations has occurred.
9.3. Amendments; Waivers. Except as provided in Section 5.3(e) or the last sentence of this Section 9.3, no amendment, modification, or waiver of any of the provisions of this Agreement shall be effective unless the same shall be in writing signed on behalf of each party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. Any amendments, modifications or waivers with respect to this Agreement can be effected by the ABL Revolving Collateral Agent, at the direction of the requisite ABL Revolving Claimholders under the ABL Revolving Credit Agreement, Notes Collateral Agent in accordance with Sections 9.01 and 9.02 of the Indenture and the First Lien Credit Facility Agent in ac-cordance with the corresponding provisions of the First Lien Credit Facility, provided that in no event shall any Term Agent or the ABL Revolving Collateral Agent be required to execute any amendment, waiver or modification which affects its rights, duties, obligations or protections. Notwithstanding the foregoing, (i) no Grantor shall have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent its rights are directly affected, (ii) any agent for holders of Pari Passu Lien Indebtedness, on behalf of itself and such holders, may become a par-ty to this Agreement, without any further action by any other party hereto, upon execution by the Compa-ny and such agent of a properly completed Pari Passu Lien Indebtedness Joinder and (iii) technical modi-fications may be made to this Agreement to facilitate the inclusion of Pari Passu Lien Indebtedness with-out any further action by any other party hereto to the extent such Pari Passu Lien Indebtedness are per-mitted to be incurred under the ABL Revolving Loan Documents and the Term Documents.
9.4. Information Concerning Financial Condition of Certain Entities. The ABL Revolving Collateral Agent and the ABL Revolving Claimholders, on the one hand, and holders of the Notes and/or lenders under the First Lien Credit Facility, on the other hand, shall each be responsible for keeping them-selves informed of (a) the financial condition of the Company and its Subsidiaries and all endorsers and/or guarantors of the ABL Revolving Obligations or the Term Obligations and (b) all other circum-stances bearing upon the risk of nonpayment of the ABL Revolving Obligations or the Term Obligations. The ABL Revolving Collateral Agent and the ABL Revolving Claimholders shall have no duty to advise the Term Agents and the Term Claimholders of information known to it or them regarding such condition or any such circumstances or otherwise. Each Term Agent and the Term Claimholders shall have no duty to advise the ABL Revolving Collateral Agent or any ABL Revolving Claimholder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event the ABL Re-volving Collateral Agent or any ABL Revolving Claimholders, or any Term Agent or any Term Claim-holders, in its or their sole discretion, undertakes at any time or from time to time to provide any such in-formation to any other party to this Agreement, it or they shall be under no obligation:
(a) to make, and the ABL Revolving Collateral Agent and the ABL Revolving Claimholders, or the Term Agents and the Term Claimholders, as the case may be, shall not be required to make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness, or validity of any such information so provided;
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(b) to provide any additional information or to provide any such information on any subsequent occasion;
(c) to undertake any investigation; or
(d) to disclose any information, which pursuant to accepted or reasonable commer-cial practices, such party wishes to maintain confidential or is otherwise required to maintain con-fidential.
9.5. Subrogation. (a) With respect to any payments or distributions in cash, property, or other assets that any Term Claimholders or the Term Agents pay over to the ABL Revolving Collateral Agent or the ABL Revolving Claimholders under the terms of this Agreement, the Term Claimholders and the Term Agents shall be subrogated to the rights of the ABL Revolving Collateral Agent and the ABL Re-volving Claimholders and (b) with respect to any payments or distributions in cash, property, or other as-sets that any ABL Revolving Claimholders or the ABL Revolving Collateral Agent pay over to the Term Agents or the Term Claimholders under the terms of this Agreement, the ABL Revolving Claimholders and the ABL Revolving Collateral Agent shall be subrogated to the rights of the Term Agents and the Term Claimholders; provided, however, that, the ABL Revolving Collateral Agent and the Term Agents each hereby agrees not to assert or enforce any such rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of ABL Revolving Obligations or Discharge of Term Obligations, as applicable, has occurred. Any payments or distributions in cash, property or other assets received by the ABL Revolving Collateral Agent or the ABL Revolving Claimholders that are paid over to the Term Agents or the Term Claimholders pursuant to this Agreement shall not reduce any of the ABL Revolving Obligations. Any payments or distributions in cash, property or other assets received by the Term Agents or the Term Claimholders that are paid over to the ABL Revolving Collateral Agent or the ABL Revolv-ing Claimholders pursuant to this Agreement shall not reduce any of the Term Obligations. Notwith-standing the foregoing provisions of this Section 9.5, none of the ABL Revolving Claimholders shall have any claim against any of the Term Claimholders for any impairment of any subrogation rights herein granted to the Term Claimholders and none of the Term Claimholders shall have any claim against any of the ABL Revolving Claimholders for any impairment of any subrogation rights herein granted to the ABL Revolving Claimholders.
9.6. SUBMISSION TO JURISDICTION; WAIVERS.
(a) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY
ARISING OUT OF OR RELATING HERETO SHALL BE BROUGHT IN THE NON-
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JU-
RISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK, BOROUGH OF MAN-
HATTAN BY EXECUTING AND DELIVERING THIS AGREEMENT. EACH PARTY NOT
LOCATED IN THE UNITED STATES IRREVOCABLY APPOINTS CT CORPORATION AS
ITS AGENT TO RECEIVE SERVICE OF PROCESS OR OTHER LEGAL SUMMONS FOR
PURPOSES OF ANY JUDICIAL PROCEEDINGS. EACH PARTY, FOR ITSELF AND ITS RE-
LATED CLAIMHOLDERS, IRREVOCABLY:
(i) AGREES THAT THE ONLY NECESSARY PARTIES TO ANY
AND ALL JUDICIAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT SHALL BE THE PARTIES HERETO, EXCEPT WHERE IN
ANY SUCH JUDICIAL PROCEEDING RELIEF (INCLUDING INJUNCTIVE
RELIEF OR THE RECOVERY OF MONEY) IS BEING SOUGHT DIRECTLY
AGAINST OR FROM A PERSON THAT IS NOT A PARTY AND EXCEPT
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THAT, IN ANY SUCH JUDICIAL PROCEEDINGS AMONG THE TERM
AGENTS OR THE ABL REVOLVING COLLATERAL AGENT THAT DOES
NOT SEEK ANY RELIEF AGAINST OR FROM ANY GRANTOR, THE GRAN-
TORS SHALL NOT BE NECESSARY PARTIES. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, AND CONSISTENT WITH THE PRO-
VISIONS OF SECTIONS 9.14 AND 9.16, NONE OF THE ABL REVOLVING
CLAIMHOLDERS (OTHER THAN THE ABL REVOLVING COLLATERAL
AGENT) OR THE TERM CLAIMHOLDERS (OTHER THAN THE TERM
AGENTS) SHALL BE NECESSARY OR OTHERWISE APPROPRIATE PAR-
TIES TO ANY SUCH JUDICIAL PROCEEDINGS, UNLESS IN SUCH JUDICIAL
PROCEEDING SUMS ARE BEING SOUGHT TO BE RECOVERED DIRECTLY
FROM SUCH PERSONS, INCLUDING PURSUANT TO SECTION 4.2 OR THE
PROVISIONS OF THIS AGREEMENT ARE SEEKING TO BE ENFORCED DI-
RECTLY AGAINST SUCH PERSONS.
(ii) ACCEPTS GENERALLY AND UNCONDITIONALLY THE JU-
RISDICTION AND VENUE OF SUCH COURTS; AND
(iii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RESPEC-
TIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING HEREUNDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL EN-
COMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER HEREOF, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT AND THAT EACH
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT.
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS RE-
VIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE; MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 9.6(b) AND EXECUTED BY THE
ABL REVOLVING COLLATERAL AGENT AND THE TERM AGENTS), AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR
MODIFICATIONS HERETO IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9.7. Notices. All notices to the ABL Revolving Claimholders permitted or required under this Agreement shall also be sent to the ABL Revolving Collateral Agent. All notices to the Term Claimhold-ers permitted or required under this Agreement shall also be sent to the applicable Term Agent. Unless otherwise specifically provided herein, any notice hereunder shall be in writing and may be personally served or sent by telefacsimile (except in the case of any Term Agent) or United States mail or courier service or electronic mail (in pdf format) and shall be deemed to have been given when delivered in per-son or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or electronic mail (in pdf format), or 3 Business Days after depositing it in the United States mail with postage prepaid and properly addressed. For the purposes hereof, the addresses of the parties hereto shall be as is set forth on Annex 1 hereto. The Notes Collateral Agent shall provide written notice to the ABL Revolving Col-
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lateral Agent of the Discharge of Notes Obligations, the First Lien Credit Facility Agent shall provide written notice to the ABL Revolving Collateral Agent of the Discharge of First Lien Obligations and the ABL Revolving Collateral Agent shall provide written notice to each Term Agent of the Discharge of ABL Revolving Obligations.
9.8. Further Assurances. The ABL Revolving Collateral Agent and each of the Term Agents agree to take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the ABL Revolving Collateral Agent or any Term Agent may rea-sonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement, all at the expense of Grantors.
9.9. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
9.10. Binding on Successors and Assigns. This Agreement shall be binding upon the ABL Re-volving Collateral Agent, the ABL Revolving Claimholders, the Term Agents, the Term Claimholders, and their respective successors and assigns.
9.11. Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any sub-stantive effect.
9.12. Counterparts. 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. Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.
9.13. No Third Party Beneficiaries. This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of and bind each of the ABL Revolving Claimholders and the Term Claimholders. Other than for purposes of Sections 2.1, 4.5, 5.1, 5.2, 5.3, 5.4, 5.5, 6.2, 7.3(b), 7.3(d) and 9.3, in no event shall any Grantor be a third party beneficiary of this Agreement.
9.14. Provisions Solely to Define Relative Rights. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the ABL Revolving Collateral Agent and the ABL Revolving Claimholders on the one hand and the Term Agents and the Term Claimholders on the other hand. Other than for purposes of Sections 2.4(b), 4.5, 5.1, 5.2, 5.3, 5.4, 5.5, 6.2, 7.3(b), 7.3(d) and 9.3, no Grantor or any other creditor thereof shall have any rights hereunder and no Grantor may rely on the terms hereof. Nothing in this Agreement shall impair, as between the Grantors and the ABL Revolving Collateral Agent and the ABL Revolving Claimholders, or as between the Grantors and the Term Agents and the Term Claimholders, the obligations of the Grantors to pay principal, interest, fees and other amounts as provided in the ABL Revolving Loan Documents and the Term Documents, respectively. The parties hereto acknowledge that the Term Agents will also enter into an intercreditor agreement or agreements, as may be required, that will govern the lien priorities in the Collateral between the Term Claimholders (the “Term Intercreditor Agreement”).
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9.15. Specific Performance. Each of the ABL Revolving Collateral Agent and the Term Agents may demand specific performance of this Agreement. The ABL Revolving Collateral Agent, on behalf of itself and the ABL Revolving Claimholders, and each Term Agent, on behalf of itself and the applicable Term Claimholders, hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by the ABL Revolving Collateral Agent or the other ABL Revolving Claimholders or the Term Agents or the other Term Claimholders, as applicable. Without limiting the generality of the foregoing or of the other provisions of this Agreement, in seeking specific performance in any Insolvency Proceeding, the ABL Revolving Collateral Agent or the Term Agents may seek such or any other relief as if it were the “holder” of the claims of the other agent’s Claimholders under Section 1126(a) of the Bankruptcy Code or otherwise had been granted an irrevocable power of attorney by the other agent’s Claimholders.
9.16. Indenture Protections and Rights. In connection with its execution and acting under this Agreement, the Notes Collateral Agent is entitled to all rights, privileges, protections, immunities, bene-fits and indemnities provided to it and the Trustee under the Indenture, all of which are incorporated by reference herein mutatis mutandis in addition to any such rights, privileges, protections, immunities, ben-efits and indemnities contained herein. In the administration of this Agreement and performance of its powers hereunder, the Notes Collateral Agent shall not be required to act hereunder unless it shall have received appropriate direction from the applicable holders of Notes, as provided in the Indenture and the other Notes Documents.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
[ ] as ABL Revolving Collateral Agent
By: Name: Title:
By: Name: Title:
THE BANK OF NEW YORK MELLON, as Notes U.S. Collateral Agent
By: Name: Title:
BNY TRUST COMPANY OF CANADA, as Notes Canadian Collateral Agent
By: Name: Title:
[[ ] as First Lien Credit Facility Agent
By: Name: Title:]
ACKNOWLEDGMENT
Each of the undersigned hereby acknowledges that it has received a copy of the foregoing Inter-creditor Agreement and consents thereto, agrees to recognize all rights granted thereby to the ABL Re-volving Collateral Agent, the ABL Revolving Claimholders, the Term Agents and the Term Claimhold-ers, and will not do any act or perform any obligation which is not in accordance with the agreements set forth therein. Each of the undersigned further acknowledges and agrees that it is not an intended benefi-ciary or third party beneficiary under the foregoing Intercreditor Agreement.
ACKNOWLEDGED AS OF THE DATE FIRST WRITTEN ABOVE:
AINSWORTH LUMBER CO. LTD.
By: Name: Title:
AINSWORTH ENGINEERED CORP.
By: Name: Title:
AINSWORTH GP LTD.
By: Name: Title:
0737562 B.C. LTD.
By: Name: Title:
AINSWORTH ENGINEERED CANADA LIMITED PARTNERSHIP
by its General Partners, Ainsworth GP Ltd.
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By: Name: Title:
AINSWORTH CORP.
By: Name: Title:
FOOTNER FOREST PRODUCTS LTD.
By: Name: Title:
ANNEX 1
Notice Addresses
(a) if to any Grantor, c/o: Ainsworth Lumber Co. Ltd., Suite 3194 Bentall 4 1055 Dunsmuir Street PO Box 49307 Vancouver, BC Canada V7X 1L3
(b) if to the ABL Revolving Collateral Agent, at: [ ] [ ] [ ] Attn: [ ] Telecopy: [ ] Email: [ ] With a copy (which shall not constitute notice) to: [ ] [ ] Attention: [ ] Email: [ ] Telephone No.: [ ] Telecopier No.: [ ]
(c) if to the Term Agent, at: The Bank of New York Mellon, as Collateral Agent 101Barclay Street, Floor 4E New York, New York 10286 Attn: International Corporate Trust Email: [ ] Telecopier No.: [ ]
With a copy (which shall not constitute notice) to: [ ] [ ] Attention: [ ] Email: [ ] Telephone No.: [ ] Telecopier No.: [ ]
EXHIBIT A TO THE INTERCREDITOR AGREEMENT
[Form of]
JOINDER AGREEMENT
[Name of First Lien Credit Facility Agent] [Address of First Lien Credit Facility Agent]
[Date]
[Names of ABL Revolving Collateral Agent, Notes U.S. Collateral Agent and Notes Canadian Collateral Agent] [Addresses of ABL Revolving Collateral Agent and Notes U.S. Collateral Agent and Notes Canadian Collateral Agent]
The undersigned, together with its successors and assigns under the [describe new facility] (the “First Lien Credit Facility”), is the First Lien Credit Facility Agent (“New Secured Agent”) for Persons (the “New Secured Claimholders”) wishing to become Term Claimholders under and as defined in the Intercreditor Agreement dated as of [ ] (as amended and/or supplemented from time to time, the “Intercreditor Agreement” (terms used without definition herein have the meanings assigned to such terms by the Intercreditor Agreement)) among [ ]., in its capacity as collateral agent under the ABL Revolving Loan Documents, including its successors and assigns in such capacity from time to time (“ABL Revolving Collateral Agent”), The Bank of New York Mellon, in its capacity as U.S. collateral agent under the Indenture and Notes Collateral Documents, including its successors and assigns in such capacity from time to time (“Notes U.S. Collateral Agent”) and BNY Trust Company of Canada, in its capacity as Canadian collateral agent under the Indenture and Notes Collateral Documents, including its successors and assigns in such capacity from time to time (“Notes Canadian Collateral Agent”).
In consideration of the foregoing, the undersigned hereby:
(i) acknowledges that the New Secured Agent has received a copy of the Intercredi-tor Agreement;
(iii) acknowledges on behalf of itself and the other New Secured Claimholders that the obligations under the First Lien Credit Facility constitute Term Obligations for all purposes of the Intercreditor Agreement; and
(iv) accepts and acknowledges the terms of the Intercreditor Agreement applicable to the First Lien Credit Facility Agent, the New Secured Claimholders and the other Term Claim-holders and agrees on its own behalf and on behalf of the New Secured Claimholders to be bound by the terms thereof applicable to holders of Term Obligations, with all the rights, duties and ob-ligations of the Term Claimholders under the Intercreditor Agreement and to be bound by all the provisions thereof as fully as if they had been named as Term Claimholders on the effective date of the Intercreditor Agreement and agrees that the First Lien Credit Facility Agent’s address for receiving notices pursuant to the Intercreditor Agreement shall be as follows:
[Address]
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THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CON-STRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly execut-ed by its authorized officer as of the ___ day of 20__.
[NAME OF FIRST LIEN CREDIT FACILITY AGENT]
By: Name: Title:
The Company hereby represents and warrants to the ABL Revolving Collateral Agent, the Notes U.S. Collateral Agent, the Notes Canadian Collateral Agent and the First Lien Credit Facility Agent on the date hereof that the First Lien Credit Facility meets the requirements set forth in the definition of First Lien Credit Facility and is permitted or not prohibited from being incurred pursuant to the terms of the Indenture and the ABL Revolving Credit Agreement.
Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada
By:_________________________________ Name: Title:
[EXHIBIT B TO THE INTERCREDITOR AGREEMENT
[Form of]
JOINDER AGREEMENT
[Name of Pari Passu Lien Agent] [Address of Pari Passu Lien Agent]
[Date]
[Names of ABL Revolving Collateral Agent, Notes U.S. Collateral Agent and Notes Canadian Collateral Agent] [Addresses of ABL Revolving Collateral Agent, Notes U.S. Collateral Agent and Notes Canadian Collat-eral Agent ]
The undersigned, together with its successors and assigns (the “New Secured Agent”) under [identify agreement governing Pari Passu Lien Indebtedness] (the “New Secured Agreement”), is the Pari Passu Lien Agent for Persons (the “New Secured Claimholders”) wishing to become Notes Claimholders under and as defined in the Intercreditor Agreement dated as of [ ] (as amended and/or supple-mented from time to time, the “Intercreditor Agreement” (terms used without definition herein have the meanings assigned to such terms by the Intercreditor Agreement)) among [ ], in its capacity as collateral agent under the ABL Revolving Loan Documents, including its successors and assigns in such capacity from time to time (“ABL Revolving Collateral Agent”), The Bank of New York Mellon, in its capacity as U.S. collateral agent under the Indenture and Notes Collateral Documents, including its suc-cessors and assigns in such capacity from time to time (“Notes U.S. Collateral Agent”), BNY Trust Com-pany of Canada, in its capacity as Canadian collateral agent under the Indenture and Notes Collateral Documents, including its successors and assigns in such capacity from time to time (“Notes Canadian Collateral Agent” and together with the Notes U.S. Collateral Agent, the “Notes Collateral Agent”) and, [ ], in its capacity as collateral agent under the Indenture and First Lien Credit Facility Agent, including its successors and assigns in such capacity from time to time (“First Lien Credit Facility Agent”) .
In consideration of the foregoing, the undersigned hereby:
(i) represents that pursuant to a joinder to the Notes Security Agreement, the New Secured Claimholders have authorized the Notes Collateral Agent to act as the agent on behalf of such New Secured Claimholders under the Intercreditor Agreement and the Notes Collateral Agent has accepted such authorization;
(ii) acknowledges that the New Secured Agent has received a copy of the Intercredi-tor Agreement;
(iii) acknowledges on behalf of itself and the other New Secured Claimholders that the obligations under the New Secured Agreement constitute Notes Obligations for all purposes of the Intercreditor Agreement; and
(iv) accepts and acknowledges the terms of the Intercreditor Agreement applicable to the New Secured Agent, the New Secured Claimholders and the other Notes Claimholders and agrees on its own behalf and on behalf of the New Secured Claimholders to be bound by the terms thereof applicable to holders of Notes Obligations, with all the rights, duties and obligations
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of the Notes Claimholders under the Intercreditor Agreement and to be bound by all the provi-sions thereof as fully as if they had been named as Notes Claimholders on the effective date of the Intercreditor Agreement and agrees that the New Secured Agent’s address for receiving notices pursuant to the Intercreditor Agreement shall be as follows:
[Address]
THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CON-STRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly execut-ed by its authorized officer as of the ___ day of 20__.
[NAME OF NEW SECURED AGENT]
By: Name: Title:
The Company hereby represents and warrants to the ABL Revolving Collateral Agent, the Notes U.S Collateral Agent, the Notes Cana-dian Collateral Agent and each Pari Passu Lien Agent on the date hereof that the New Secured Agreement meets the requirements set forth in the definition of Pari Passu Lien Indebtedness and is permitted or not prohibit-ed from being incurred pursuant to the terms of the Indenture and the ABL Revolving Credit Agreement.
Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada
By:_________________________________ Name: Title:
EXHIBIT H
[FORM OF SENIOR INTERCREDITOR AGREEMENT]
[See attached].
FORM OF SENIOR INTERCREDITOR AGREEMENT
This SENIOR INTERCREDITOR AGREEMENT is dated as of [ ], and entered into by and among [ ], in its capacity as collateral agent under the First Lien Credit Facility Docu-ments (as defined below), including its successors and assigns in such capacity from time to time (“First Lien Credit Facility Agent”), The Bank of New York Mellon, in its capacity as U.S. collateral agent under the Indenture and Notes Collateral Documents (each as defined below), including its successors and as-signs in such capacity from time to time (“Notes U.S. Collateral Agent”) and BNY Trust Company of Canada, in its capacity as Canadian collateral agent under the Indenture and Notes Collateral Documents, including its successors and assigns in such capacity from time to time (“Notes Canadian Collateral Agent”).
RECITALS
Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada (the “Com-pany”) (including it successors and assigns, the “Notes Issuer”), certain of the Company’s Subsidiaries from time to time party thereto as guarantors (such Subsidiaries, the “Notes Guarantors” and each indi-vidually a “Notes Guarantor), The Bank of New York Mellon, as trustee (the “Trustee”), and the Notes Collateral Agent, have entered into that certain Indenture dated as of November 27, 2012 (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “In-denture”), pursuant to which the Notes Issuer’s 7.5% Senior Secured Notes due 2017 (together with any “Additional Notes, as such term is defined in the Indenture, the “Notes”) were issued;
The Company (the “First Lien Credit Facility Borrower”), certain of the Company’s Subsidiaries from time to time party thereto as guarantors (such Subsidiaries, the “First Lien Credit Facility Guaran-tors” and each individually a “First Lien Credit Facility Guarantor”), the lenders or investors from time to time party thereto (the “First Lien Credit Facility Lenders”), [ ], as First Lien Credit Facility Agent, and the other agents and arrangers party thereto, have entered into that certain [First Lien Credit Facility] (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “First Lien Credit Facility”), dated as of [ ];
The First Lien Obligations are to be secured on a first priority basis, by Liens on all the Collateral of the First Lien Credit Facility Borrowers and the First Lien Credit Facility Guarantors;
The Notes Obligations are to be secured on a second priority basis, by Liens on all the Collateral of the Notes Issuer and the Notes Guarantors;
The First Lien Credit Facility Documents and the Notes Documents provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral and certain other matters; and
The First Lien Credit Facility Agent (on behalf of itself and the other First Lien Credit Facility Claimholders) and the Notes Collateral Agent (on behalf of themselves and the other Notes Claimholders) have agreed to the intercreditor and other provisions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
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SECTION 1. Definitions.
1.1. Defined Terms. As used in the Agreement, the following terms shall have the following meanings:
“Agents” means the Notes U.S. Collateral Agent, the Notes Canadian Collateral Agent and the First Lien Credit Facility Agent.
“Agreement” means this Senior Intercreditor Agreement.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.
“Bankruptcy Law” means the Bankruptcy Code, the BIA, the CCAA, or any other federal, state, provincial or foreign law relating to bankruptcy, judicial management, insolvency, winding-up, dissolu-tion, litigation, receivership, reorganization, administration or relief of debtors, in each case as now or hereafter in effect, or any successor statute.
“BIA” means the Bankruptcy and Insolvency Act (Canada) as now and hereafter in effect, or any successor statute.
“Business Day” means any day except Saturday, Sunday and any day which shall be in New York, New York, a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close.
“Canadian Insolvency Proceeding” means (a) any case, action or proceeding before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, interim re-ceivership, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors or other similar arrangement in re-spect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under Canadian federal, provincial or territorial law, including any proceeding un-der the BIA or the CCAA and any proceeding under applicable corporate law seeking a compromise or arrangement of any debts of the corporation, or a stay of proceedings to enforce any of the claims of the corporation’s creditors against it.
“Cash Collateral” has the meaning set forth in Section 6.2.
“CCAA” means the Companies’ Creditors Arrangement Act (Canada) as now and hereafter in ef-fect, or any successor statute.
“Claimholders” means, with respect to the First Lien Obligations, all First Lien Credit Facility Claimholders, and with respect to the Notes Obligations, all Notes Claimholders.
“Collateral” means all of the assets and property of the Company and its Subsidiaries (other than Excluded Assets), whether real, personal or mixed, with respect to which a Lien is granted as security for any First Lien Obligations or any Notes Obligations.
“Company” has the meaning set forth in the recitals to this Agreement.
“Default Disposition” means, any private or public Disposition of all or any material portion of the Collateral by one or more Grantors with the consent of the First Lien Credit Facility Collateral Agent
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or the Notes Collateral Agent after the occurrence and during the continuance of an First Lien Credit Fa-cility Default or Notes Default (and prior to the Discharge of First Lien Obligations), in connection with good faith efforts by the applicable Agent to collect the applicable Obligations through the Disposition of Collateral.
“Discharge of First Lien Obligations” means, except to the extent otherwise expressly provided in Section 5.5(a):
(a) the full cash payment of the First Lien Obligations, including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respec-tive documentation (whether or not allowed as a claim during such Insolvency Proceeding) (other than Bank Product Debt and First Lien Credit Facility Secured Hedging Obligations to the extent not due and payable, undrawn amounts in respect of outstanding Letters of Credit and contingent indemnification obligations except as provided in clause (f) below);
(b) the termination or expiration of all commitments, if any, to extend credit that would constitute First Lien Obligations;
(c) the termination or cash collateralization (in an amount and in the manner required by the First Lien Credit Facility or otherwise on terms and conditions reasonably satisfactory to the First Lien Credit Facility Agent and the applicable First Lien Credit Facility Issuing Banks) of all outstanding Letters of Credit and inchoate or contingent First Lien Obligations (or delivery of a standby letter of credit acceptable to (and issued by a financial institution reasonably acceptable to) the First Lien Credit Facility Agent and the applicable First Lien Credit Facility Issuing Banks in their discretion, in the amount of required cash collateral);
(d) the full cash payment of the First Lien Bank Product Debt, to the extent due and payable, including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim in any such Insolvency Proceeding), and the termination or expiration of all commitments, if any, in re-spect of the First Lien Bank Product Debt;
(e) the full cash payment of the First Lien Obligations, to the extent due and payable, including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim in any such Insolvency Proceeding) and the termination of all First Lien Credit Facility Secured Hedging Agreements or, at the option of the First Lien Credit Facility Secured Hedging Creditors, cash collateralization in an amount and pursuant to arrangements satisfactory to the First Lien Credit Facility Secured Hedging Creditors; and
(f) the cash collateralization (or letter of credit support) for any contingent indemni-fication obligations not yet due and payable, but for which a claim has been asserted in writing under any First Lien Credit Facility Documents, in each case on terms and conditions acceptable to the applicable First Lien Credit Facility Claimholders.
“Discharge of Notes Obligations” means the full cash payment of the Notes Obligations (other than inchoate or contingent Notes Obligations for which a claim has not yet been asserted in writing un-der any Notes Documents), including any interest, fees and other charges accruing during an Insolvency Proceeding at the rate provided for in the respective documentation (whether or not allowed as a claim during such Insolvency Proceeding).
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“Disposition” or “Dispose” means the sale, assignment, transfer, license, lease (as lessor), ex-change, or other disposition (including any sale and leaseback transaction) of any property by any person (or the granting of any option or other right to do any of the foregoing).
“Excluded Assets” has the meaning set forth in the Notes Security Agreements.
“Exercise any Secured Creditor Remedies” or “Exercise of Secured Creditor Remedies” means (a) the taking of any action to enforce any Lien in respect of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, the Collateral, including the institution of any judicial or nonjudicial foreclo-sure proceedings or having or seeking to have a trustee, receiver, liquidator, monitor or similar official appointed for or over the Collateral or taking any action to take possession of the Collateral, the giving of notice of any public or private sale or other Disposition pursuant to the PPSA, Article 8 or Article 9 of the UCC or other applicable law or any diligently pursued in good faith attempt to vacate or obtain relief from a stay or other injunction restricting any other action described in this definition, (b) the exercise of any right or remedy provided to a secured creditor under the First Lien Credit Facility Documents or the Notes Documents (including, in either case, any delivery of any notice to otherwise seek to obtain pay-ment directly from any account debtor of any Grantor or the taking of any action or the exercise of any right or remedy in respect of the set off or recoupment against the Collateral or proceeds of Collateral), under applicable law, at equity, in an Insolvency Proceeding or otherwise, including credit bidding or oth-erwise the acceptance of Collateral in full or partial satisfaction of a Lien, (c) the sale, assignment, trans-fer, lease, license, or other Disposition of all or any portion of the Collateral, by private or public sale or any other means, (d) the solicitation of bids from third parties to conduct the liquidation of all or a materi-al portion of Collateral to the extent undertaken and being diligently pursued in good faith to consummate the Disposition of such Collateral within a commercially reasonable time, (e) the engagement or retention of sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers, or other third parties for the purposes of valuing, marketing, or Disposing of, all or a material portion of the Collateral to the extent undertaken and being diligently pursued in good faith to consummate the Disposition of such Collateral within a commercially reasonable time, (f) the exercise of any other enforcement right relating to the Collateral (including the exercise of any voting rights relating to any capital stock composing a por-tion of the Collateral or seeking relief from the automatic stay) whether under the First Lien Credit Facili-ty Documents, the Notes Documents, under applicable law of any jurisdiction, in equity, in an Insolvency Proceeding, or otherwise or (g) the pursuit of Default Dispositions relative to all or a material portion of the Collateral; provided that any of the following actions shall not in any case constitute Exercise any Se-cured Creditor Remedies or Exercise of Secured Creditor Remedies: (i) the filing of a proof of claim in any Insolvency Proceeding, (ii) the consent by any Agent, in accordance with the First Lien Credit Facili-ty Documents or Notes Documents, as applicable, to Disposition by any Grantor of any of the Collateral (other than in connection with liquidation of such Collateral at the request of such Agent) and (iii) the acceleration of the First Lien Obligations or the Notes Obligations.
“First Lien Bank Product Debt” means [“Bank Product Debt”] as such term is defined in the First Lien Credit Facility].
“First Lien Credit Facility” has the meaning set forth in the preamble to this Agreement.
“First Lien Credit Facility Agent” has the meaning set forth in the preamble to this Agreement.
“First Lien Credit Facility Claimholders” means, at any relevant time, the holders of First Lien Obligations.
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“First Lien Credit Facility Collateral Documents” means the [“Collateral Documents”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Default” means any “Event of Default,” as such term is defined in the First Lien Credit Facility, or any event of default under any other First Lien Credit Facility Documents.
“First Lien Credit Facility Documents” means (v) the First Lien Credit Facility, (w) the First Lien Credit Facility Collateral Documents, (x) each First Lien Credit Facility Guaranty, (y) each First Lien Credit Facility Treasury Services Agreement and (z) each First Lien Credit Facility Secured Hedging Agreement.
“First Lien Credit Facility Guaranty” means the [“Guaranty”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Issuing Banks” means the [“Issuing Banks”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Lenders” has the meaning set forth in the preamble to this Agreement.
“First Lien Credit Facility Secured Hedging Agreement” means the [“Secured Hedging Agree-ments”] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Secured Hedging Creditors” means the [“Secured Hedging Creditors] as such term is defined in the First Lien Credit Facility.
“First Lien Credit Facility Treasury Services Agreement” means the [Treasury Services Agree-ment”] as such term is defined in the First Lien Credit Facility
“First Lien Obligations” means all obligations, indebtedness, liabilities and other amounts owing, due, or secured under the terms of the First Lien Credit Facility or any other First Lien Credit Facility Document, whether now existing or arising hereafter, including all principal, premium, interest, fees, at-torneys fees and expenses, costs, charges, expenses, reimbursement obligations, indemnities, guarantees, and all other amounts payable under or secured by any First Lien Credit Facility Document (including, in each case, all amounts (including interest, fees and expenses) accruing on or after the commencement of any Insolvency Proceeding at the rate provided in the First Lien Credit Facility or any other First Lien Credit Facility Documents, as applicable, whether or not a claim for all or any portion of such amount is allowable or is allowed in any such Insolvency Proceeding.
“Governmental Authority” means the government of the United States of America, Canada or any other nation, any political subdivision thereof, whether state, provincial, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising execu-tive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to gov-ernment.
“Grantors” means the Notes Issuer, the Notes Guarantors, the First Lien Credit Facility Borrower, the First Lien Credit Facility Guarantors and each other Person that may from time to time execute and deliver a First Lien Credit Facility Collateral Document or a Notes Collateral Document as a “debtor,” “grantor,” or “pledgor” (or the equivalent thereof).
“Indenture” has the meaning set forth in the recitals to this Agreement.
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“Insolvency Proceeding” means:
(a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Grantor including any Canadian Insolvency Proceeding;
(b) any other voluntary or involuntary insolvency or bankruptcy case or proceeding, or any receivership, liquidation or other similar case or proceeding with respect to any Grantor or with respect to a material portion of its assets;
(c) any liquidation, dissolution, or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or
(d) any assignment for the benefit of creditors or any other marshaling of assets for creditors of any Grantor or other similar arrangement in respect of such Grantor’s creditors gen-erally.
“Letters of Credit” means the “Letters of Credit,” as that term is defined in First Lien Credit Fa-cility.
“Lien” means any lien, mortgage, pledge, assignment, security interest, hypothec, charge, or en-cumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust, or other prefer-ential arrangement having the practical effect of any of the foregoing.
“Mortgage” means each mortgage, deed of trust, deed of hypothec or deed to secure debt pursu-ant to which a Grantor grants to (a) the First Lien Credit Facility Agent, for the benefit of the First Lien Credit Facility Claimholders, Liens upon the real estate Collateral owned or leased by such Grantor, as security for the First Lien Obligations or (b) the Notes Collateral Agent, for the benefit of the Notes Claimholders, Liens upon the real estate Collateral owned or leased by such Grantor, as security for the Notes Obligations.
“Notes” has the meaning set forth in the recitals to this Agreement.
“Notes Claimholders” means Holders (as such term is defined in the Indenture) from time to time of Notes, the Trustee and the Notes Collateral Agent, each Pari Passu Lien Agent and each holder of Pari Passu Lien Indebtedness.
“Notes Canadian Collateral Agent” has the meaning set forth in the preamble to this Agreement.
“Notes Collateral Agent” means the Notes U.S. Collateral Agent and/or the Notes Canadian Col-lateral Agent, as the context may require.
“Notes U.S. Collateral Agent” has the meaning set forth in the preamble to this Agreement.
“Notes Collateral Documents” means the Notes Security Agreements, the Mortgages and any other agreement pursuant to which a Lien is granted securing (or purporting to secure) any Notes Obliga-tions or under which rights or remedies with respect to such Liens are governed.
“Notes Default” means any “Event of Default,” as such term is defined in the Notes Security Agreements, or any event of default under any other Notes Document.
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“Notes Documents” means the Indenture, the Notes, the Notes Collateral Documents and each Pari Passu Lien Agreement (as defined in the Notes Security Agreements).
“Notes Guarantor” has the meaning set forth in the recitals to this Agreement.
“Notes Issuer” has the meaning set forth in the recitals to this Agreement.
“Notes Obligations” means all obligations, indebtedness, liabilities and other amounts owing, due, or secured under the terms of the Indenture or any other Notes Document (including, without limita-tion, the Pari Passu Lien Indebtedness), whether now existing or arising hereafter, including all principal, premium, interest, fees, attorneys fees and expenses, costs, charges, expenses, reimbursement obligations, indemnities, guarantees, and all other amounts payable under or secured by any Notes Document (includ-ing, in each case, all amounts (including interest, fees and expenses) accruing on or after the commence-ment of any Insolvency Proceeding at the rate provided in the Notes Indenture relating to the Notes Issuer or any other Notes Documents, as applicable, whether or not a claim for all or any portion of such amount is allowable or is allowed in any such Insolvency Proceeding, provided that any Pari Passu Lien Indebt-edness shall constitute “Notes Obligations” hereunder only to the extent it constitutes “Secured Obliga-tions” (as such term is defined in the Notes Security Agreements).
“Notes Security Agreements” means a U.S. law governed security agreement and Canadian law governed security agreements, each dated November 27, 2012, (as amended, restated, amended and re-stated, supplemented or otherwise modified from time to time) by and among the Notes Issuer, as appli-cable, the Notes Guarantors party thereto, as applicable, and the Notes Canadian Collateral Agent or the Notes U.S. Collateral Agent, as applicable.
“Obligations” means, as applicable, (a) all Fist Lien Obligations and (b) all Notes Obligations.
“Pari Passu Lien Agent” has the meaning set forth in the Notes Security Agreements.
“Pari Passu Lien Indebtedness” has the meaning set forth in the Indenture.
“Pari Passu Lien Indebtedness Joinder” shall mean a joinder agreement in the form of Exhibit A hereto.
“Person” means any natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority, or other entity.
“Pledged Collateral” has the meaning set forth in Section 5.4(a).
“PPSA” shall mean the Personal Property Security Act (Ontario) and to the extent applicable based on the location of the personal property or debtor and the application of applicable conflicts rules, any other applicable federal, provincial or territorial statute pertaining to the granting, perfecting, priority or ranking of security interests, liens or hypothecs on personal property (including the Civil Code (Que-bec)), and any successor statutes, together with any regulations thereunder, in each case as in effect from time to time.
“Recovery” has the meaning set forth in Section 6.7.
“Refinance” means, in respect of any indebtedness, to refinance, extend, renew, defease, supple-ment, restructure, replace, refund or repay, or to issue other indebtedness in exchange or replacement for
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such indebtedness, in whole or in part, whether with the same or different lenders, investors, arrangers and/or agents. “Refinanced” and “Refinancing” shall have correlative meanings.
“Senior DIP Financing” has the meaning set forth in Section 6.2(a).
“Standstill Period” has the meaning set forth in Section 3.1(a).
“Subsidiary” of a person means a corporation, partnership, limited liability company, or other en-tity in which that person directly or indirectly owns or controls at least 50% of the shares of capital stock having ordinary voting power to vote in the election of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.
“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in ef-fect in any applicable jurisdiction.
1.2. Construction. The definitions of terms in this Agreement shall apply equally to the sin-gular and plural forms of the terms defined. Whenever the context may require, any pronoun shall in-clude 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.” The term “or” shall be construed to have, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” Un-less the context requires otherwise:
(a) except as otherwise provided herein, any definition of or reference to any agree-ment, instrument, or other document herein shall be construed as referring to such agreement, in-strument, or other document as from time to time amended, restated, supplemented, modified, re-newed, extended, Refinanced, refunded, or replaced;
(b) any reference to any agreement, instrument, or other document herein “as in ef-fect on the date hereof” shall be construed as referring to such agreement, instrument, or other document without giving effect to any amendment, restatement, supplement, modification, or Re-finance after the date hereof;
(c) any definition of or reference to the First Lien Obligations or the Notes Obliga-tions herein shall be construed as referring to the First Lien Obligations or the Notes Obligations (as applicable) as from time to time amended, restated, supplemented, modified, renewed, ex-tended, Refinanced, refunded, or replaced;
(d) any reference herein to any Person shall be construed to include such Person’s successors and assigns;
(e) 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;
(f) all references herein to Sections shall be construed to refer to Sections of this Agreement; and
(g) 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.
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SECTION 2. Lien Priorities.
2.1. Relative Priorities. Notwithstanding the date, time, method, manner, or order of grant, at-tachment, or perfection of any Liens securing (or purportedly securing) the First Lien Obligations with respect to the Collateral or of any Liens securing (or purportedly securing) the Notes Obligations with respect to the Collateral (including, in each case, irrespective of whether any such Lien is granted (or se-cures Obligations relating to the period) before or after the commencement of any Insolvency Proceeding) and notwithstanding any contrary provision of the UCC, the PPSA or any other applicable law or the First Lien Credit Facility Documents or the Notes Documents, as applicable, or any defect or deficiencies in, or failure to attach or perfect, the Liens securing (or purportedly securing) any of the Obligations, or any other circumstance whatsoever:
(a) any Lien with respect to the Collateral securing any First Lien Obligations now or hereafter held by or on behalf of, or created for the benefit of, the First Lien Credit Facility Agent or any First Lien Credit Facility Claimholders or any agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall, until the Discharge of First Lien Obligations has occurred, be senior in all re-spects and prior to any Lien with respect to the Collateral securing any Notes Obligations; and
(b) any Lien with respect to the Collateral securing any Notes Obligations now or hereafter held by or on behalf of, or created for the benefit of, the Notes Collateral Agent, any Notes Claimholders or any agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and sub-ordinate in all respects to all Liens with respect to the Collateral securing any First Lien Credit Facility Obligations.
The subordination of Liens provided for in this Agreement shall continue to be effective with re-spect to any part of the Collateral from and after the date hereof whether such Liens are declared, or ruled to be, invalid, unenforceable, void or not allowed by a court of competent jurisdiction or otherwise, and whether as a result of any action taken by the Notes Collateral Agent or the First Lien Credit Facility Agent, as applicable, or any failure by such Person to take any action with respect to any financing state-ment (including any amendment to or continuation thereof), mortgage or other perfection document, or otherwise. Notwithstanding anything in this Section 2.1 to the contrary, neither the Notes Collateral Agent nor the First Lien Credit Facility Agent shall have any obligation to ensure or enforce the priority of liens described herein.
2.2. Prohibition on Contesting Liens or Obligations. Each of the Notes Collateral Agent, for themselves and on behalf of any applicable Notes Claimholder, and the First Lien Credit Facility Agent, for itself and on behalf of each First Lien Credit Facility Claimholder, agrees that it will not (and hereby waives any right to), directly or indirectly, contest, or support any other Person in contesting, in any pro-ceeding (including any Insolvency Proceeding): (a) the priority, validity, attachment, perfection or en-forceability of a Lien in the Collateral held by or on behalf of the First Lien Credit Facility Agent or any other First Lien Credit Facility Claimholders or by or on behalf of the Notes Collateral Agent or any other Notes Claimholders, as the case may be; or (b) the priority, validity or enforceability of any Obligations, including the allowability or priority of any Obligations in any Insolvency Proceeding; provided, however that nothing in this Agreement shall be construed to prevent or impair the rights of the First Lien Credit Facility Agent, any First Lien Credit Facility Claimholder, the Notes Collateral Agent or any Notes Claimholder to enforce the terms of this Agreement, including the provisions of this Agreement relating to the priority of the Liens securing the First Lien Obligations and the Notes Obligations, as applicable, as provided in Section 3.
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2.3. New Liens. During the term of this Agreement, whether or not any Insolvency Proceed-ing has been commenced by or against any Grantor, the parties hereto agree, subject to Section 6, that no Grantor shall:
(a) grant or suffer to exist any Liens on any asset to secure any Notes Obligation un-less such Grantor also offers to grant, and, at the option of First Lien Credit Facility Agent, grants, a Lien on such asset to secure the First Lien Obligations concurrently with the grant of a Lien thereon in favor of the Notes Collateral Agent in accordance with the priorities set forth in this Agreement and the First Lien Credit Facility Collateral Documents and the Notes Collateral Documents; or
(b) grant or suffer to exist any Liens on any asset to secure any First Lien Obliga-tions unless such Grantor grants a Lien on such asset to secure the Notes Obligations concurrently with the grant of a Lien thereon in favor of First Lien Credit Facility Agent in accordance with the priorities set forth in this Agreement and the First Lien Credit Facility Collateral Documents and the Notes Collateral Documents.
2.4. Cooperation in Designating Collateral. (a) In furtherance of Section 9.8, the parties here-to agree to cooperate in good faith from time to time in order to determine the specific items included in the Collateral and the steps taken or to be taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the First Lien Credit Facility Documents and the Notes Docu-ments provided that the Notes Collateral Agent shall have no obligation to determine such steps taken or to be taken.
(b) At the reasonable request and expense of the First Lien Credit Facility Borrower, in connec-tion with the entering of a First Lien Credit Facility, or the Refinancing of any First Lien Obligations, each Notes Claimholder or the Notes Collateral Agent, as applicable shall execute any filings under the UCC, PPSA, title registry or in in any other public offices to give effect to the priorities set forth in this Agreement; provided that the Notes Collateral Agent shall have no obligation to execute any such filing, unless the applicable Grantor has provided an officer’s certificate attaching such filing and certifying that such filing shall not affect perfection of the applicable Notes Claimholders’ security interests and Liens in the Collateral and that such filing shall solely give effect to the priorities set forth in this Agreement.
SECTION 3. Exercise of Remedies.
3.1. Exercise of Remedies by the Notes Collateral Agent. (a) Subject to Section 3.4, until the Discharge of First Lien Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, the Notes Agent and the Notes Claimholders will not exercise or seek to exercise any rights or remedies with respect to any Collateral (including any Exercise of Secured Creditor Remedies with respect to any Collateral) or commence any judicial or nonjudicial foreclosure and/or enforcement proceedings with respect to, seek to have a trustee, receiver, liquidator or similar offi-cial appointed for or over, attempt any action to take possession of, or otherwise take any action to en-force its interest in or realize upon, or take any other action available to it in respect of, the Collateral; provided that notwithstanding anything herein to the contrary, the Notes Collateral Agent may, but shall have no obligation to, take any such action and exercise any remedies (including Exercise Secured Credi-tor Remedies) after expiration of a 180-day period commencing on the date when the Notes Collateral Agent delivers a notice to the First Lien Credit Facility Agent that a Notes Default has occurred and is continuing (such period, the “Standstill Period”), unless the First Lien Credit Facility Agent has com-menced and is diligently pursuing exercise of remedies with respect to all or a substantial portion of Col-
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lateral or all Notes Defaults have been cured or waived in accordance with the terms of the Notes Docu-ments.
(b) Subject to Section 3.4 and Section 3.8, until the Discharge of First Lien Obliga-tions has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, the Notes Agent and the Notes Claimholders will not directly or indirectly contest, protest, or object to or hinder any Exercise of Secured Creditor Remedies by the First Lien Credit Facility Agent with respect to any Collateral and have no right to direct the First Lien Credit Facility Agent to Exercise any Secured Creditor Remedies with respect to any Collateral or take any other action under the First Lien Credit Facility Documents with respect to any Collateral, and will not object to (and waive any and all claims with respect to) the forbearance by the First Lien Credit Facility Agent or the First Lien Credit Facility Claimholders from exercising any rights or remedies with respect to any Collateral (including any Exercise of Secured Creditor Remedies with respect to any Collateral).
3.2. [Reserved].
3.3. Exclusive Enforcement Rights. (a) Subject to Section 3.4, until the Discharge of First Lien Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, the First Lien Credit Facility Agent shall have the exclusive right to Exercise any Secured Creditor Remedies with respect to the Collateral without any consultation with or the consent of the Notes Collateral Agent or any Notes Claimholder. In connection with any Exercise of Secured Credi-tor Remedies, the First Lien Credit Facility Agent may enforce the provisions of the First Lien Credit Fa-cility Collateral Documents and exercise any and all rights, powers and remedies thereunder, all in such order and in such manner as it may determine in the exercise of its sole discretion. Such exercise and en-forcement shall include the rights of an agent or receiver appointed by it to Dispose of Collateral, to incur expenses in connection with such Disposition, and to exercise all the rights and remedies of a secured creditor under applicable law.
3.4. Claimholders Permitted Actions. Anything to the contrary in Section 3.1 notwithstand-ing, the Notes Collateral Agent may, but shall not be obligated to:
(a) if an Insolvency Proceeding has been commenced by or against any Grantor, file a proof of claim or statement of interest with respect to its Collateral or otherwise with respect to the Notes Obligations, or otherwise file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of such Grantor arising under any Insol-vency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Code, the BIA, the CCAA or oth-er comparable laws of any applicable jurisdiction);
(b) take any action in order to create, perfect, preserve or protect (but not enforce) its Lien in and to its Collateral except to the extent inconsistent with the provisions hereof;
(c) file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding, or other pleading made by any person objecting to or otherwise seeking the disallowance or subordination of its claims or those of the Notes Claim-holders or the avoidance of its Liens;
(d) make any arguments and motions that are, in each case, in accordance with the terms of this Agreement; and
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(e) exercise any of its rights or remedies with respect to the Collateral after the ter-mination of the Standstill Period to the extent permitted by the proviso in Section 3.1(a).
Anything to the contrary in Section 3.1 notwithstanding, in any Insolvency Proceeding, the Notes Claimholders may vote (in accordance with the respective Notes Documents) on any plan of reorganiza-tion, except to the extent inconsistent with the provisions hereof.
Except as expressly set forth in this Agreement, the Notes Collateral Agent on behalf of the Notes Claimholder shall have any and all rights and remedies it may have as an unsecured creditor under any applicable law; provided, however, that any judgment Lien obtained in connection therewith shall be sub-ject to the Lien priorities set forth herein and to the provisions of this Agreement. The First Lien Credit Facility Agent may enforce the provisions of the First Lien Credit Facility Loan Documents, the Notes Collateral Agent may enforce the provisions of the Notes Documents, as the case may be, and each may Exercise Any Secured Creditor Remedies (to the extent permitted hereunder), all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of this Agreement and mandatory provisions of applicable law; provided, however, that each of the First Lien Credit Facility Agent and the Notes Collateral Agent agrees to provide to the other (x) a notice prior to its Exercise of Secured Creditor Remedies and (y) copies of any notices that it is required under applicable law to deliver to the Company or any other Grantor in connection with any Exercise of Secured Creditor Remedies; provided further, however, that the First Lien Credit Facility Agent’s failure to provide copies of any such notices to the Notes Collateral Agent shall not impair any of the First Lien Credit Facility Agent’s rights hereunder or under any of the First Lien Credit Facility Documents and the Notes Collat-eral Agent failure to provide copies of any such notices to the First Lien Credit Facility Agent shall not impair any of the Notes Collateral Agent’s rights hereunder or under any of the Notes Documents.
3.5. [Reserved].
3.6. Non-Interference by the Notes Collateral Agent. Subject to Sections 3.1, 3.3, 3.4, and 6.5, the Notes Collateral Agent, on behalf of the Notes Claimholders, until the Discharge of the First Lien Obligations has occurred:
(a) will not exercise or seek to exercise any rights or remedies with respect to any Collateral;
(b) will not knowingly take or cause to be taken any action to make any Lien that the holders of the Notes Obligations have on the Collateral equal with, or to give the Notes Collateral Agent or any Notes Claimholder any preference or priority relative to, any Lien that the holders of any First Lien Obligations have with respect to such Collateral;
(c) will not challenge or question in any proceeding the validity or enforceability of any security interest of the First Lien Credit Facility Agent in the Collateral, or the validity, at-tachment, perfection or priority of any Lien held by the holders of any First Lien Obligations se-cured by any Collateral;
(d) will not knowingly take or cause to be taken any action to interfere, hinder or de-lay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other dis-position of the Collateral by the First Lien Credit Facility Agent or the holders of any First Lien Obligations, whether by foreclosure or otherwise;
(e) will have no right to (i) direct the First Lien Credit Facility Agent or any holder of any First Lien Obligations to exercise any right, remedy or power with respect to Collateral or
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(ii) consent to the exercise by the First Lien Credit Facility Agent or any holder of any First Lien Obligations of any right, remedy or power with respect to Collateral;
(f) will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the First Lien Credit Facility Agent or any holder of any First Lien Obligations seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither the First Lien Credit Facility Agent nor any holders of any First Lien Obligations will be liable for, any action taken or omitted to be taken by the First Lien Credit Facility Agent or such lenders with respect to Collateral;
(g) will not object to (and waive any and all claims with respect to) the forbearance by the First Lien Credit Facility Agent from exercising any remedies with respect to the Collat-eral;
(h) will not seek, and will waive any right, to have any Collateral or any part thereof marshaled upon any foreclosure, realization or other disposition of such Collateral; and
(i) will not attempt, directly or indirectly, whether by judicial proceedings or other-wise, to challenge the enforceability of any provision of this Agreement.
3.7. [Reserved].
3.8. Commercially Reasonable Dispositions. Each Notes Collateral Agent, for itself and on behalf of the Notes Claimholders hereby irrevocably, absolutely, and unconditionally waives any right to object (and seek or be awarded any relief of any nature whatsoever based on any such objection), at any time prior or subsequent to any Disposition of any of the Collateral, on the ground(s) that any such Dispo-sition of Collateral (a) would not be or was not “commercially reasonable” within the meaning of any ap-plicable UCC, PPSA or applicable law and/or (b) would not or did not comply with any other requirement under any applicable UCC, PPSA or under any other applicable law governing the manner in which a se-cured creditor (including one with a Lien on real property) is to realize on its collateral.
SECTION 4. Proceeds.
4.1. Application of Proceeds.
(a) Subject to the terms of the ABL Intercreditor Agreement, if any, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, any Collateral or proceeds thereof received in connection with any Exercise of Secured Creditor Remedies (including as a result of any distribution of or in respect of any Collateral (whether or not expressly characterized as such) or in any Insolvency Proceeding) shall be applied: (i) first, to the payment of costs and expenses of the First Credit Facility Agent incurred in connection with the foreclosure on or realization of the Collateral, (ii) second, to the payment in full in cash or, to the extent permitted by the First Lien Credit Facility Docu-ments, cash collateralization, of all First Lien Obligations in accordance with the First Lien Credit Facility Documents, (iii) third, to the payment of costs and expenses of the Trustee and Notes Collateral Agent incurred in connection with the foreclosure on or realization of the Collateral and (iv) fourth, to the pay-ment in full in cash of the Notes Obligations in accordance with the Notes Documents.
(b) If any Exercise of Secured Creditor Remedies with respect to the Collateral pro-duces non-cash proceeds, then such non-cash proceeds shall be held by the First Lien Credit Facility Agent as additional Collateral and, at such time as such non-cash proceeds are monetized, shall be applied as set forth above.
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4.2. Turnover. Subject to the terms of the ABL Intercreditor Agreement, if any, unless and until the earlier of the Discharge of First Lien Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, if the Notes Collateral Agent or any Notes Claimholder obtains possession of any Collateral or realizes any proceeds or payment in respect of the Collateral (including in each case, assets or proceeds subject to Liens referred to in Section 2.3), pursuant to any Notes Collateral Document or by the exercise of any rights available to it under applicable law or in any Canadian Insolvency Proceeding or other Insolvency Proceeding or through any other exercise of remedies, at any time when any First Lien Obligations secured or intended to be secured by such Collat-eral remains outstanding or any commitment to extend credit that would constitute First Lien Obligations secured or intended to be secured by such Collateral remains in effect, then it will hold such Collateral, proceeds or payments in trust on behalf of the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders and reasonably promptly after obtaining actual knowledge or notice from the First Lien Credit Facility Agent that such Person has possession of such proceeds or payments, transfer or pay over to the First Lien Credit Facility Agent for the benefit of the First Lien Credit Facility Claimholders, in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The First Lien Credit Facility Agent is hereby authorized to make any such en-dorsements as agent for the Notes Collateral Agent and any Notes Claimholders. This authorization is coupled with an interest and is irrevocable until the Discharge of First Lien Obligations.
Each Notes Collateral Agent for itself and each Notes Claimholder by its acceptance of the Notes or Pari Passu Lien Indebtedness, as applicable, hereby agrees that if, at any time, all or part of any payment with respect to any First Lien Obligations previously made shall be rescinded for any reason whatsoever, it will promptly pay over to First Lien Credit Facility Agent any payment received by it and shall promptly turn any such Collateral then held by it over to First Lien Credit Facility Agent, and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of such First Lien Obligations.
4.3. No Subordination of the Relative Priority of Claims. Anything to the contrary contained herein notwithstanding, the subordination of the Liens of Notes Claimholders to the Liens of First Lien Credit Facility Claimholders as set forth herein is with respect to the priority of the respective Liens held by or on behalf of them only and shall not constitute a subordination of the Notes Obligations to the First Lien Obligations.
4.4. Revolving Nature of Revolving Obligations. Each Notes Collateral Agent, on behalf of the Notes Claimholders, acknowledges and agrees that the First Lien Credit Facility may include a revolv-ing commitment and that the amount of the First Lien Obligations that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed.
SECTION 5. Releases; Dispositions; Other Agreements.
5.1. Releases.
(a) If, in connection with the Exercise of Secured Creditor Remedies by the First Lien Credit Facility Agent, including any Default Disposition of the Collateral, as provided for in Section 3, irrespective of whether an First Lien Credit Facility Default or a Notes Default has occurred and is con-tinuing, the First Lien Credit Facility Agent releases any of its Liens on any part of the Collateral, then the Liens of the Notes Collateral Agent on such Collateral shall be automatically, unconditionally, and simul-taneously released and terminated; provided, however, that any proceeds remaining after the Discharge of First Lien Obligations shall continue to be subject to the Liens of the Notes Claimholders. Each Notes Collateral Agent, for itself or on behalf of any such Notes Claimholders, promptly shall execute and de-
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liver to the First Lien Credit Facility Agent such termination or amendment statements, releases, and oth-er documents provided to it as the First Lien Credit Facility Agent may reasonably request to effectively confirm such release, at the cost and expense of the Company and without the consent or direction of any other Notes Claimholders.
(b) If, in connection with any Disposition of any Collateral permitted under the terms of the First Lien Credit Facility Documents and not expressly prohibited under the terms of the Notes Documents, the First Lien Credit Facility Agent, for itself or on behalf of any First Lien Credit Facility Claimholders, releases any of its Liens on the portion of the Collateral that is the subject of such Disposi-tion, other than (i) in connection with the Discharge of First Lien Obligations, or (ii) after the occurrence and during the continuance of any Notes Default, then the Liens of the Notes Collateral Agent on such Collateral shall be automatically, unconditionally, and simultaneously released and terminated. The Notes Collateral Agent, for itself or on behalf of any such Notes Claimholders, promptly shall execute and deliver to the First Lien Credit Facility Agent such termination or amendment statements, releases, and other documents as the First Lien Credit Facility Agent may request to effectively confirm such re-lease, at the cost and expense of the Company and without the consent or direction of any other Notes Claimholders.
5.2. Insurance. Subject to the terms of the ABL Intercreditor Agreement, if any, unless and until written notice of the occurrence of the Discharge of First Lien Obligations has been delivered to the Notes Collateral Agent by the First Lien Credit Facility Agent: (i) the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders shall have the sole and exclusive right, subject to the rights of the Grantors under the First Lien Credit Facility Documents, to adjust and settle any claim under any in-surance policy covering or constituting the Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) af-fecting the Collateral; and (ii) all proceeds of any such insurance policy and any such award (or any pay-ments with respect to a deed in lieu of condemnation) if in respect of Collateral, shall be paid, subject to the rights of the Grantors under the First Lien Credit Facility Documents, first, to the First Lien Credit Facility Claimholders, until the Discharge of First Lien Obligations, second, to the Notes Claimholders, until the Discharge of Notes Obligations, and third, to the owner of the subject property, such other per-son as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct.
5.3. Amendments; Refinancings.
(a) The First Lien Credit Facility Documents may be amended, restated, amended and restated, supplemented, or otherwise modified in accordance with their terms (or replaced in connec-tion with a Refinancing of the First Lien Obligations (or portions thereof)) and the First Lien Obligations may be Refinanced, in each case without notice to, or the consent of, the Notes Collateral Agent or the Notes Claimholders (except to the extent a consent is otherwise required to permit the Refinancing under the Notes Documents), all without affecting the lien subordination or other provisions of this Agreement; provided, however, that, in the case of a Refinancing, the holders of such Refinancing debt (or an author-ized agent or trustee on their behalf) bind themselves (in a writing addressed to the Notes Collateral Agent for the benefit of itself and the Notes Claimholders) to the terms of this Agreement pursuant to such documents or agreements (including amendments or supplements to this Agreement) as the Notes Collateral Agent shall reasonably request; provided further, however, that, if such Refinancing debt is secured by a Lien on any Collateral the holders of such Refinancing debt shall be deemed bound by the terms hereof regardless of whether or not such writing is provided. For the avoidance of doubt, the sale or other transfer of indebtedness is not restricted by this Agreement but the provisions of this Agreement shall be binding on all holders of the First Lien Obligations and the Notes Obligations.
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(b) The Notes Documents may be amended, restated, amended and restated, supple-mented, or otherwise modified in accordance with their terms (or replaced in connection with a Refinanc-ing of the Notes Obligations (or portions thereof)) and the Notes Obligations may be Refinanced, in each case without notice to, or the consent of, the First Lien Credit Facility Agent or the First Lien Credit Fa-cility Claimholders (except to the extent a consent is otherwise required to permit the Refinancing under the First Lien Credit Facility Documents), all without affecting the lien subordination or other provisions of this Agreement; provided, however, that, in the case of a Refinancing, the holders of such Refinancing debt (or an authorized agent or trustee on their behalf) bind themselves (in a writing addressed to the First Lien Credit Facility Agent for the benefit of itself and the First Lien Credit Facility Claimholders) to the terms of this Agreement pursuant to such documents or agreements (including amendments or supple-ments to this Agreement) as the First Lien Credit Facility Agent shall reasonably request; provided fur-ther, however, that, if such Refinancing debt is secured by a Lien on any Collateral the holders of such Refinancing debt shall be deemed bound by the terms hereof regardless of whether or not such writing is provided.
(c) So long as the Discharge of First Lien Obligations has not occurred, each Notes Collateral Document shall include the following language (or similar language acceptable to the First Lien Credit Facility Agent): “Notwithstanding anything herein to the contrary, the liens and security in-terests granted to [ ], as [ ] Collateral Agent, pursuant to this Agreement and the exercise of any right or remedy by [ ], as [ ] Collateral Agent hereunder, are subject to the provisions of the Intercred-itor Agreement, dated as of [ ] (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among [ ], as First Lien Credit Facility Agent, The Bank of New York Mellon, as Notes U.S. Collateral Agent and BNY Trust Company of Can-ada, as Notes Canadian Collateral Agent and the Grantors (as defined in the Intercreditor Agreement) from time to time party thereto. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern and control.”
(d) In connection with any Refinancing or replacement contemplated by this Sec-tion 5.3, this Agreement shall be amended at the written request and sole expense of the Company (sub-ject to the provisions of clauses (a) and (b) above in this Section 5.3), and without the consent of the First Lien Credit Facility Agent or the Notes Collateral Agent, (i) to add parties (or any authorized agent or trustee therefor) providing any such Refinancing or replacement indebtedness, (ii) to establish that Liens on any Collateral securing the indebtedness being Refinanced or replaced shall have the same priority as the Liens on any Collateral securing the Collateral being Refinanced or replaced, and (iii) to facilitate the inclusion of Pari Passu Lien Indebtedness without any further action by any other party thereto to the ex-tent such Pari Passu Lien Indebtedness is permitted to be incurred under the First Lien Credit Facility and the Indenture.
5.4. Bailee for Perfection.
(a) The First Lien Credit Facility Agent agrees to hold or control that part of the Col-lateral that is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC, the PPSA or other applicable law (such Collateral, which shall include, without limitation, deposit accounts subject to deposit account control agreements, being referred to as the “Pledged Collateral”), as gratuitous bailee and as a nonfiduciary agent for the benefit and on behalf of the Notes Collateral Agent (such bailment and agency being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2), 9-313(c), 9-104, 9-105, 9-106, and 9-107 of the UCC and applicable provisions of the PPSA), solely for the pur-pose of perfecting the security interest granted under the Notes Documents, subject to the terms and con-
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ditions of this Section 5.4. Each Notes Collateral Agent and the Notes Claimholders hereby appoint the First Lien Credit Facility Agent as their gratuitous bailee for the purposes of perfecting their security in-terest in all Pledged Collateral in which the First Lien Credit Facility Agent has a perfected security inter-est under the PPSA or the UCC. The First Lien Credit Facility Agent hereby accepts such appointment pursuant to this Section 5.4(a) and acknowledges and agrees that it shall act for the benefit of and on be-half of the Notes Collateral Agent with respect to any Pledged Collateral. Unless and until the Discharge of First Lien Obligations as notified to the Notes Collateral Agent in writing, the Notes Collateral Agent agrees to promptly notify the First Lien Credit Facility Agent of any Pledged Collateral constituting Col-lateral held by it or actually known by it to be held by any other Notes Claimholders, and, immediately upon the request of the First Lien Credit Facility Agent at any time prior to the Discharge of First Lien Obligations, the Notes Collateral Agent agrees to deliver to the First Lien Credit Facility Agent any such Pledged Collateral held by it or by any Notes Claimholders, together with any necessary endorsements (or otherwise allow the First Lien Credit Facility Agent to obtain control of such Pledged Collateral).
(b) The First Lien Credit Facility Agent shall have no obligation whatsoever to the Notes Collateral Agent or any Notes Claimholder to ensure that the Pledged Collateral is genuine or owned by any of Grantors or to preserve rights or benefits of any person except as expressly set forth in this Section 5.4. The duties or responsibilities of the First Lien Credit Facility Agent under this Section 5.4 shall be limited solely to holding or controlling the Pledged Collateral as bailee and agent in accord-ance with this Section 5.4 and delivering the Pledged Collateral upon a Discharge of First Lien Obliga-tions as provided in paragraph (d) of this Section 5.4.
(c) The First Lien Credit Facility Agent acting pursuant to this Section 5.4 shall not have by reason of the First Lien Credit Facility Documents, the Notes Collateral Documents, or this Agreement a fiduciary relationship in respect of the Notes Collateral Agent or any Notes Claimholder.
(d) Subject to the terms of the ABL Intercreditor Agreement, if any, upon the Dis-charge of First Lien Obligations, the First Lien Credit Facility Agent shall deliver the remaining Pledged Collateral (if any) together with any necessary endorsements, first, to the Notes Collateral Agent to the extent Notes Obligations remain outstanding as confirmed in writing by the Notes Collateral Agent, and, to the extent that the Notes Collateral Agent confirm no Notes Obligations are outstanding, second, to the Company to the extent no First Lien Credit Facility or Notes Obligations that are secured by such Pledged Collateral remain outstanding (in each case, so as to allow such person to obtain possession or control of such Pledged Collateral). At such time, the First Lien Credit Facility Agent further agrees to take all oth-er action reasonably requested by the Notes Collateral Agent at the sole cost and expense of the Company (including amending any outstanding control agreements) to enable such Notes Collateral Agent to obtain a first priority security interest in the Collateral.
5.5. When Discharge of First Lien Obligations Deemed to Not Have Occurred. If the First Lien Credit Facility Borrowers (or any of them) enter into any Refinancing of the First Lien Obligations that is intended to be secured by the Collateral on a first priority basis, then a Discharge of First Lien Ob-ligations shall be deemed not to have occurred for all purposes of this Agreement, and the obligations un-der such Refinancing of such First Lien Obligations shall be treated as First Lien Obligations for all pur-poses of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the First Lien Credit Facility Agent under the First Lien Credit Facility Documents effecting such Refinancing shall be the First Lien Credit Facility Agent for all purposes of this Agree-ment. The First Lien Credit Facility Agent under such First Lien Credit Facility Documents shall agree (in a writing addressed to the Notes Collateral Agent) to be bound by the terms of this Agreement.
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5.6. Injunctive Relief. Should any Notes Claimholder in any way take, attempt to, or threaten to take any action contrary to terms of this Agreement with respect to the Collateral, or fail to take any action required by this Agreement, the First Lien Credit Facility Agent or any other First Lien Credit Fa-cility Claimholder, as the case may be, may obtain relief against such Notes Claimholder by injunction, specific performance, or other appropriate equitable relief, it being understood and agreed by the Notes Collateral Agent and each Notes Claimholder that (a) First Lien Credit Facility Claimholders’ damages from such actions may at that time be difficult to ascertain and may be irreparable, and (b) each Notes Claimholder waives any defense that such Grantor and/or other Claimholders can demonstrate damage and/or be made whole by the awarding of damages. The Notes Collateral Agent and each Claimholder hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by the First Lien Credit Facility Agent or the First Lien Credit Facility Claimholders.
SECTION 6. Insolvency Proceedings.
6.1. Enforceability and Continuing Priority. This Agreement shall be applicable both before and after the commencement of any Insolvency Proceeding and all converted or succeeding cases in re-spect thereof. The relative rights of Claimholders in or to any distributions from or in respect of any Col-lateral or proceeds of Collateral shall continue after the commencement of any Insolvency Proceeding. Accordingly, the provisions of this Agreement (including, without limitation, Section 2.1) are intended to be and shall be enforceable as a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code and applicable provisions of Bankruptcy Law. All references in this Agreement to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor in any Insolvency Proceeding. All references in this Agreement to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor in any Insolvency Proceeding.
6.2. Financing.
(a) Until the Discharge of First Lien Obligations, if any Grantor shall be subject to any Canadian Insolvency Proceeding or other Insolvency Proceeding and, if applicable, the First Lien Credit Facility Agent shall consent to the use of cash collateral (as such term is defined in Section 363(a) of the Bankruptcy Code; herein, “Senior Cash Collateral”) constituting Collateral, or to permit any Gran-tor to obtain financing to be provided by any one or more First Lien Credit Facility Claimholders or other Persons under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law or in any Canadian Insolvency Proceeding secured by a Lien on the Collateral (such financing, a “Senior DIP Financing”), and if the relevant Grantor(s) desire to use such Senior Cash Collateral or to obtain such Senior DIP Fi-nancing, then the Notes Collateral Agent agrees and each Notes Claimholder agrees by its acceptance of the benefits hereof, that it will be deemed to have consented, will raise no objection to, nor support any other Person objecting to, the use of such Senior Cash Collateral or to such Senior DIP Financing (includ-ing, except to the extent provided in Section 6.5, any objection based on an assertion that the Notes Claimholders are entitled to adequate protection of their interest in the Collateral as a condition thereto), and the Notes Collateral Agent will subordinate its Liens upon the Collateral to the Liens securing such Senior DIP Financing (and all obligations relating thereto, including any “carve-out” in favor of, or Lien in respect of, of fees and expenses of professionals as agreed to by First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders with respect to the Collateral) to the extent any Liens securing the First Lien Obligations are discharged, subordinated to, or made pari passu with any new Liens secur-ing such Senior DIP Financing and to any replacement or additional Liens granted as adequate protection of the interests of the holders of the First Lien Obligations in the Collateral or otherwise, in each case to the extent consistent with the other provisions of this Agreement. The foregoing provisions of this Section 6.2(a) shall not prevent the Notes Collateral Agent from objecting to any provision in any Senior Cash
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Collateral order or Senior DIP Financing documentation relating to any provision or content of a plan of reorganization.
(b) All Liens granted to the First Lien Credit Facility Agent or the Notes Collateral Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended by the parties to be and shall be deemed to be subject to the Lien priorities in Section 2.1 and the other terms and conditions of this Agreement.
6.3. Sales. Subject to Section 3.4(a), the Notes Collateral Agent will consent, and will not ob-ject to or oppose a sale or motion to Dispose of any Collateral (including bidding and other procedures in respect of such Disposition) of the other party free and clear of any Liens or other claims in favor of such other party under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code or other applicable law or under applicable Canadian Insolvency Proceedings or other Insolvency Proceed-ings if the requisite First Lien Credit Facility Claimholders under the First Lien Credit Facility have con-sented to such sale or Disposition of the Collateral, so long as the terms of any proposed order approving such transaction provide for the Liens of the respective Claimholders on such Collateral attach to the pro-ceeds thereof subject to the relative Lien priorities set forth in Section 2.1 and the other terms and condi-tions of this Agreement. Nothing in this Agreement shall impair the rights of any party to credit bid un-der applicable Bankruptcy Law (including Section 363(k) of the Bankruptcy Code, if applicable) or pur-suant to this Agreement.
6.4. Relief from the Automatic Stay. Until the Discharge of First Lien Obligations has oc-curred, the Notes Collateral Agent will not seek (or support any other Person seeking) relief from the au-tomatic stay or any other stay in any Insolvency Proceeding in respect of the Collateral, without the prior written consent of the First Lien Credit Facility Agent, except to the extent the First Lien Credit Facility Agent has received relief from such stay in respect of the Collateral or (b) object (or support any other person objecting) to any motion for relief from the automatic stay or from any injunction against foreclo-sure or enforcement in respect of the Collateral made by First Lien Credit Facility Agent or any First Lien Credit Facility Claimholder.
6.5. Adequate Protection. None of the Notes Collateral Agent or Notes Claimholders shall oppose (or support the opposition of any other Person to) in any Insolvency Proceeding under the Bank-ruptcy Code involving any Grantor (i) any motion or other request by the First Lien Credit Facility Agent or First Lien Credit Facility Claimholders for adequate protection of the First Lien Credit Facility Agent’s Liens upon the Collateral, including any claim of the First Lien Credit Facility Agent or First Lien Credit Facility Claimholders to post-petition interest, fees or expenses or otherwise as a result of their Lien on the Collateral, request for adequate protection for the application of proceeds of Collateral to the Obliga-tions, and request for replacement or additional Liens on post-petition assets, or (ii) any objection by the First Lien Credit Facility Agent or First Lien Credit Facility Claimholders to any motion, relief, action or proceeding based on the First Lien Credit Facility Agent or the First Lien Credit Facility Claimholders claiming a lack of adequate protection with respect to their Liens in the Collateral.
6.6. Section 1111(b) of the Bankruptcy Code. In any Insolvency Proceeding under the Bank-ruptcy Code involving a Grantor, the Notes Collateral Agent shall not object to, oppose, support any ob-jection, or take any other action to impede, the right of the First Lien Credit Facility Agent to make an election under Section 1111(b)(2) of the Bankruptcy Code. So long as the respective rights and remedies available to the Notes Collateral Agent hereunder are not impaired thereby, the Notes Collateral Agent waives any claim it may hereafter have against any First Lien Credit Facility Claimholder arising out of the election by such First Lien Credit Facility Claimholder of the application of Section 1111(b)(2) of the Bankruptcy Code.
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6.7. Avoidance Issues. If any First Lien Credit Facility Claimholder is required in any Insol-vency Proceeding or otherwise to turn over, disgorge or otherwise pay to the estate of any Grantor any amount paid in respect of the First Lien Obligations (a “Recovery”), then such First Lien Credit Facility Claimholders shall be entitled to a reinstatement of the First Lien Obligations with respect to all such re-covered amounts, and all rights, interests, priorities and privileges recognized in this Agreement shall ap-ply with respect to any such Recovery. If this Agreement shall have been terminated prior to such Re-covery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties hereto from such date of reinstatement.
6.8. Plan of Reorganization. If, in any Insolvency Proceeding involving a Grantor, debt obli-gations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are dis-tributed or reinstated (in whole or in part) pursuant to a plan of reorganization or similar dispositive re-structuring plan, both on account of the First Lien Obligations and on account of the Notes Obligations, then, to the extent the debt obligations distributed on account of the First Lien Obligations and on account of the Notes Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
6.9. Separate Grants of Security and Separate Classification. The First Lien Credit Facility Agent, on behalf of the First Lien Credit Facility Claimholders, and the Notes Collateral Agent, on behalf of the Notes Claimholders, acknowledge that: the respective grants of Liens pursuant to the First Lien Credit Facility Collateral Documents and the Notes Collateral Documents constitute two separate and dis-tinct grants of Liens, and because of, among other things, their differing rights in the Collateral, (i) the Notes Obligations do not give rise to a commonality of interest and are fundamentally different from the First Lien Obligations and must be separately classified in any plan of reorganization proposed or con-firmed (or approved) in an Insolvency Proceeding. To further effectuate the intent of the parties as pro-vided in the immediately preceding sentence, if it is held that the claims of the First Lien Credit Facility Claimholders and the Notes Claimholders in respect of the Collateral constitute claims in the same class (rather than at least two separate classes of secured claims with the priorities described in Section 2.1), then the First Lien Credit Facility Claimholders and the Notes Claimholders hereby acknowledge and agree that all distributions from the Collateral shall be made as if there were two separate classes of First Lien Obligations and Notes Obligations (with the effect being that, to the extent that the aggregate value of the First Lien Credit Facility Claimholders’ Collateral is sufficient (for this purpose ignoring all claims held by the Notes Claimholders thereon), the First Lien Credit Facility Claimholders shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition or pre-filing inter-est and other claims, all amounts owing in respect of post-petition or post-filing interest, fees or expenses that is available from their Collateral (regardless of whether any such claims may or may not be allowed or allowable in whole or in part as against the Grantor in the respective Insolvency Proceeding pursuant to Section 506(b) of the Bankruptcy Code or applicable law), before any distribution is made from the Col-lateral in respect of the Notes Obligations with respect to such Collateral, with each Notes Claimholder acknowledging and agreeing to turn over to the First Lien Credit Facility Agent with respect to such Col-lateral amounts otherwise received or receivable by them from the Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recov-eries of the Notes Obligations).
SECTION 7. Reliance; Waivers; Etc.
7.1. Reliance. Other than any reliance on the terms of this Agreement, the First Lien Credit Facility Agent, on behalf of the First Lien Credit Facility Claimholders, acknowledges that it and such
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First Lien Credit Facility Claimholders have, independently and without reliance on the Notes Collateral Agent or any Notes Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the First Lien Credit Facility Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the First Lien Credit Facility Documents or this Agreement. Other than any reliance on the terms of this Agreement, each Holder of Notes, Holder of Pari Passu Lien In-debtedness and each Holder of First Lien Obligations acknowledge that they and the Notes Collateral Agent have, independently and without reliance on the First Lien Credit Facility Agent or any First Lien Credit Facility Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the Notes Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Notes Documents or this Agreement.
7.2. No Warranties or Liability. The First Lien Credit Facility Agent, on behalf of the First Lien Credit Facility Claimholders, acknowledges and agrees that the Notes Collateral Agent has not made an express or implied representation or warranty, including with respect to the execution, validity, legali-ty, completeness, collectibility, or enforceability of any of the Notes Documents, the ownership by any Grantor of any Collateral, or the perfection or priority of any Liens thereon. Except as otherwise express-ly provided herein, the Notes Collateral Agent and the Notes Claimholders will be entitled to manage and supervise the Notes Documents in accordance with law and as they may otherwise, in their sole discre-tion, deem appropriate. The Notes Collateral Agent, on behalf of the Notes Claimholders, acknowledges and agrees that the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility, or enforceability of any of the First Lien Credit Facility Documents, the ownership of any Collateral, or the perfection or priority of any Liens thereon. Except as otherwise expressly provided herein, the First Lien Credit Facility Claimholders will be entitled to manage and su-pervise their respective loans and extensions of credit under the First Lien Credit Facility Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. Except as ex-pressly provided herein, the Notes Collateral Agent and the Notes Claimholders shall have no duty to the First Lien Credit Facility Agent or any First Lien Credit Facility Claimholders, and the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders shall have no duty to the Notes Collateral Agent and the Notes Claimholders, to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an “event of default” or “default” under any agreements with any Grantor (including the First Lien Credit Facility Documents and the Notes Documents), regardless of any knowledge thereof which they may have or be charged with. The First Lien Credit Facility Agent, on behalf of the First Lien Credit Facility Claimholders, acknowledges and agrees that the Notes Collateral Agent may, but shall have no obligation to, take all such actions it may determine necessary to perfect or continue the perfection of the Notes Claimholders’ junior-priority security interest in the Collateral and the Notes Collateral Agent shall not in any way be liable for any lapse of perfection or for maintaining perfection.
7.3. No Waiver of Lien Priorities.
(a) No right of the First Lien Credit Facility Claimholders, the First Lien Credit Fa-cility Agent or any of them to enforce any provision of this Agreement or any First Lien Credit Facility Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act by any First Lien Credit Facility Claimholder or the First Lien Credit Facility Agent, or by any noncompliance by any person with the terms, provisions, and covenants of this Agreement, any of the First Lien Credit Facility Documents or any of the Notes Documents, re-
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gardless of any knowledge thereof which the First Lien Credit Facility Agent or the First Lien Credit Fa-cility Claimholders, or any of them, may have or be otherwise charged with.
(b) Subject to any rights of the Grantors under the First Lien Credit Facility Docu-ments and the Notes Documents and subject to the provisions of Section 5.3(a), the First Lien Credit Fa-cility Agent and the First Lien Credit Facility Claimholders may, at any time and from time to time in accordance with the First Lien Credit Facility Documents and/or applicable law, without the consent of, or notice to, the Notes Collateral Agent or any Notes Claimholders, without incurring any liabilities to the Notes Collateral Agent or any Notes Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of the Notes Collateral Agent or the Notes Claimholders is affected, impaired, or extinguished thereby) do any one or more of the following without the prior written consent of the Notes Collateral Agent or any Notes Claimholders:
(i) make loans and advances to any Grantor or issue, guaranty or obtain let-ters of credit for account of any Grantor or otherwise extend credit to any Grantor, in any amount and on any terms, whether pursuant to a commitment or as a discretionary ad-vance and whether or not any default or event of default or failure of condition is then continuing;
(ii) change the manner, place, or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase, or alter, the terms of any of the First Lien Obligations or any Lien on any Collateral or guarantee thereof or any liability of any Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the First Lien Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify, or supplement in any manner any Liens held by the First Lien Credit Fa-cility Agent or any First Lien Credit Facility Claimholders, the First Lien Obligations, or any of the First Lien Credit Facility Documents;
(iii) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Collateral or any liability of any Grantor to the First Lien Credit Facility Claimholders or the First Lien Credit Facility Agent, or any liability incurred directly or indirectly in respect thereof;
(iv) settle or compromise any First Lien Obligation or any other liability of any Grantor or any security therefor or any liability incurred directly or indirectly in re-spect thereof and apply any sums by whomsoever paid and however realized to any lia-bility (including the First Lien Obligations) in any manner or order that is not inconsistent with the terms of this Agreement;
(v) exercise or delay in or refrain from exercising any right or remedy against any Grantor or any other person, elect any remedy and otherwise deal freely with any Grantor or any Collateral and any security and any guarantor or any liability of any Grantor to any First Lien Credit Facility Claimholders or any liability incurred directly or indirectly in respect thereof;
(vi) take or fail to take any Lien securing the First Lien Obligations or any other collateral security for any First Lien Obligations or take or fail to take any action which may be necessary or appropriate to ensure that any Lien securing First Lien Obli-gations or any other Lien upon any property is duly enforceable or perfected or entitled to
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priority as against any other Lien or to ensure that any proceeds of any property subject to any Lien are applied to the payment of any First Lien Obligation or any Obligation se-cured thereby; and
(vii) otherwise release, discharge or permit the lapse of any Liens securing the First Lien Obligations or any other Liens upon any property at any time securing any First Lien Obligations.
(c) Except as otherwise provided herein, the First Lien Credit Facility Claimholders and the First Lien Credit Facility Agent shall have no liability to the Notes Collateral Agent and the Notes Claimholders, and the Notes Collateral Agent and the Notes Claimholders hereby waive any claim against any First Lien Credit Facility Claimholder or the First Lien Credit Facility Agent, arising out of any and all actions which the First Lien Credit Facility Claimholders or the First Lien Credit Facility Agent may, pursuant to the terms hereof, take, permit or omit to take with respect to:
(i) the First Lien Credit Facility Documents;
(ii) the collection of the First Lien Obligations; or
(iii) the foreclosure upon, or sale, liquidation, or other Disposition of, or the failure to foreclose upon, or sell, liquidate, or otherwise dispose of, any Collateral. Each Notes Collateral Agent and the Notes Claimholders agree that the First Lien Credit Fa-cility Claimholders and the First Lien Credit Facility Agent have no duty to them in re-spect of the maintenance or preservation of the Collateral, the First Lien Obligations, or otherwise.
7.4. Obligations Unconditional. For so long as this Agreement is in full force and effect, all rights, interests, agreements and obligations of the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders and the Notes Collateral Agent and Notes Claimholders, respectively, here-under shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any First Lien Credit Facility Documents or any Notes Documents;
(b) except as otherwise expressly restricted in this Agreement, any change in the time, manner, or place of payment of, or in any other teens of, all or any of the First Lien Obliga-tions or Notes Obligations, or any amendment or waiver or other modification, including any in-crease in the amount thereof, whether by course of conduct or otherwise, of the terms of any First Lien Credit Facility Document or any Notes Document;
(c) except as otherwise expressly restricted in this Agreement, any exchange of any security interest in any Collateral or any other collateral, or any amendment, waiver or other mod-ification, whether in writing or by course of conduct or otherwise, of all or any of the First Lien Obligations or Notes Obligations or any guarantee thereof;
(d) the commencement of any Insolvency Proceeding in respect of any Grantor; or
(e) any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Grantor in respect of the First Lien Credit Facility Agent, the First Lien Ob-ligations, any First Lien Credit Facility Claimholder, the Notes Collateral Agent, any Notes Claimholder, or the Notes Obligations in respect of this Agreement.
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SECTION 8. Representations and Warranties.
8.1. Representations and Warranties of Each Party. Each party hereto represents and warrants to the other parties hereto as follows:
(a) Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder.
(b) This Agreement has been duly executed and delivered by such party.
8.2. Representations and Warranties of Each Agent. The First Lien Credit Facility Agent and the Notes Collateral Agent each represents and warrants to the other that it has been authorized by First Lien Credit Facility Lenders or holders of Notes, as applicable, under the First Lien Credit Facility or the Indenture, as applicable, to enter into this Agreement.
SECTION 9. Miscellaneous.
9.1. Conflicts. Except to the extent expressly provided in Section 9.16, in the event of any conflict between the provisions of this Agreement and the provisions of any of the First Lien Credit Facil-ity Documents or any of the Notes Documents, the provisions of this Agreement shall govern and control.
9.2. Effectiveness; Continuing Nature of this Agreement; Severability. This Agreement shall become effective when executed and delivered by the parties hereto. This is a continuing agreement of lien subordination (as opposed to debt or claim subordination) and the First Lien Credit Facility Claim-holders may continue, at any time and without notice to the Notes Collateral Agent or the Notes Claim-holders, to extend credit and other financial accommodations to or for the benefit of any Grantor consti-tuting First Lien Obligations in reliance hereon. The terms of this Agreement shall survive, and shall con-tinue in full force and effect, in any Insolvency Proceeding. Consistent with, but not in limitation of, the preceding sentence, the First Lien Credit Facility Agent and the Notes Collateral Agent, on behalf of the applicable Claimholders, irrevocably acknowledges that this Agreement constitutes a “subordination agreement” within the meaning of both New York law and Section 510(a) of the Bankruptcy Code. Any provision of this Agreement that is prohibited or unenforceable shall not invalidate the remaining provi-sions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. All references to any Grantor shall include such Grantor as debtor and debtor in possession and any receiver or trustee for such Grantor in any Insolvency Proceeding. This Agreement shall terminate and be of no further force and effect on the date that the Dis-charge of First Lien Obligations or the Discharge of Notes Obligations has occurred.
9.3. Amendments; Waivers. Except as provided in Section 5.3(e) or the last sentence of this Section, no amendment, modification, or waiver of any of the provisions of this Agreement shall be effec-tive unless the same shall be in writing signed on behalf of each party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such par-ty in any other respect or at any other time. Any amendments, modifications or waivers with respect to this Agreement can be effected by the First Lien Credit Facility Agent, at the direction of the requisite First Lien Credit Facility Claimholders under the First Lien Credit Facility, Notes Collateral Agent in ac-cordance with Sections 9.01 and 9.02 of the Indenture and the First Lien Credit Facility Agent in accord-ance with the corresponding provisions of the First Lien Credit Facility, provided that in no event shall the Notes Collateral Agent or the First Lien Credit Facility Agent be required to execute any amendment,
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waiver or modification which affects its rights, duties, obligations or protections. Notwithstanding the foregoing, (i) no Grantor shall have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent its rights are directly affected, (ii) any agent for holders of Pari Passu Lien Indebtedness, on behalf of itself and such holders, may become a par-ty to this Agreement, without any further action by any other party hereto, upon execution by the Compa-ny and such agent of a properly completed Pari Passu Lien Indebtedness Joinder and (iii) technical modi-fications may be made to this Agreement to facilitate the inclusion of Pari Passu Lien Indebtedness with-out any further action by any other party hereto to the extent such Pari Passu Lien Indebtedness are per-mitted to be incurred under the First Lien Credit Facility Documents and the Notes Documents.
9.4. Information Concerning Financial Condition of Certain Entities. The First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders, on the one hand, and holders of the Notes and/or lenders under the First Lien Credit Facility, on the other hand, shall each be responsible for keep-ing themselves informed of (a) the financial condition of the Company and its Subsidiaries and all en-dorsers and/or guarantors of the First Lien Obligations or the Notes Obligations and (b) all other circum-stances bearing upon the risk of nonpayment of the First Lien Obligations or the Notes Obligations. The First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders shall have no duty to ad-vise the Notes Collateral Agent and the Notes Claimholders of information known to it or them regarding such condition or any such circumstances or otherwise. Each Notes Collateral Agent and the Notes Claimholders shall have no duty to advise the First Lien Credit Facility Agent or any First Lien Credit Facility Claimholder of information known to it or them regarding such condition or any such circum-stances or otherwise. In the event the First Lien Credit Facility Agent or any First Lien Credit Facility Claimholders, or the Notes Collateral Agent or any Notes Claimholders, in its or their sole discretion, un-dertakes at any time or from time to time to provide any such information to any other party to this Agreement, it or they shall be under no obligation:
(a) to make, and the First Lien Credit Facility Agent and the First Lien Credit Facili-ty Claimholders, or the Notes Collateral Agent and the Notes Claimholders, as the case may be, shall not be required to make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness, or validity of any such information so provid-ed;
(b) to provide any additional information or to provide any such information on any subsequent occasion;
(c) to undertake any investigation; or
(d) to disclose any information, which pursuant to accepted or reasonable commer-cial practices, such party wishes to maintain confidential or is otherwise required to maintain con-fidential.
9.5. Subrogation. With respect to any payments or distributions in cash, property, or other as-sets that any Notes Claimholders or the Notes Collateral Agent pay over to the First Lien Credit Facility Agent or the First Lien Credit Facility Claimholders under the terms of this Agreement, the Notes Claim-holders and the Notes Collateral Agent shall be subrogated to the rights of the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders; provided, however, that, the Notes Collateral Agent hereby agrees not to assert or enforce any such rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of First Lien Obligations has occurred. Any payments or dis-tributions in cash, property or other assets received by the Notes Collateral Agent or the Notes Claim-
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holders that are paid over to the First Lien Credit Facility Agent or the First Lien Credit Facility Claim-holders pursuant to this Agreement shall not reduce any of the Notes Obligations.
9.6. SUBMISSION TO JURISDICTION; WAIVERS.
(a) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY
ARISING OUT OF OR RELATING HERETO SHALL BE BROUGHT IN THE NON-
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JU-
RISDICTION IN THE. STATE, COUNTY AND CITY OF NEW YORK, BOROUGH OF MAN-
HATTAN BY EXECUTING AND DELIVERING THIS AGREEMENT. EACH PARTY NOT
LOCATED IN THE UNITED STATES IRREVOCABLY APPOINTS CT CORPORATION AS
ITS AGENT TO RECEIVE SERVICE OF PROCESS OR OTHER LEGAL SUMMONS FOR
PURPOSES OF ANY JUDICIAL PROCEEDINGS. EACH PARTY, FOR ITSELF AND ITS RE-
LATED CLAIMHOLDERS, IRREVOCABLY:
(i) AGREES THAT THE ONLY NECESSARY PARTIES TO ANY
AND ALL JUDICIAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT SHALL BE THE PARTIES HERETO, EXCEPT WHERE IN
ANY SUCH JUDICIAL PROCEEDING RELIEF (INCLUDING INJUNCTIVE
RELIEF OR THE RECOVERY OF MONEY) IS BEING SOUGHT DIRECTLY
AGAINST OR FROM A PERSON THAT IS NOT A PARTY AND EXCEPT
THAT, IN ANY SUCH JUDICIAL PROCEEDINGS AMONG THE NOTES COL-
LATERAL AGENTS OR THE FIRST LIEN CREDIT FACILITY AGENT THAT
DOES NOT SEEK ANY RELIEF AGAINST OR FROM ANY GRANTOR, THE
GRANTORS SHALL NOT BE NECESSARY PARTIES. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, AND CONSISTENT WITH THE
PROVISIONS OF SECTIONS 9.14 AND 9.16, NONE OF THE FIRST LIEN
CREDIT FACILITY CLAIMHOLDERS (OTHER THAN THE FIRST LIEN
CREDIT FACILITY AGENT ) OR THE NOTES CLAIMHOLDERS (OTHER
THAN THE NOTES COLLATERAL AGENTS) SHALL BE NECESSARY OR
OTHERWISE APPROPRIATE PARTIES TO ANY SUCH JUDICIAL PRO-
CEEDINGS, UNLESS IN SUCH JUDICIAL PROCEEDING SUMS ARE BEING
SOUGHT TO BE RECOVERED DIRECTLY FROM SUCH PERSONS, INCLUD-
ING PURSUANT TO SECTION 4.2 OR THE PROVISIONS OF THIS AGREE-
MENT ARE SEEKING TO BE ENFORCED DIRECTLY AGAINST SUCH PER-
SONS.
(ii) ACCEPTS GENERALLY AND UNCONDITIONALLY THE JU-
RISDICTION AND VENUE OF SUCH COURTS; AND
(iii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RESPEC-
TIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING HEREUNDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL EN-
COMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER HEREOF, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT AND THAT EACH
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HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT.
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS RE-
VIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE; MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 9.6(b) AND EXECUTED BY THE
FIRST LIEN CREDIT FACILITY AGENT AND THE NOTES COLLATERAL AGENTS), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUP-
PLEMENTS, OR MODIFICATIONS HERETO IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9.7. Notices. All notices to the First Lien Credit Facility Claimholders permitted or required under this Agreement shall also be sent to the First Lien Credit Facility Agent. All notices to the Notes Claimholders permitted or required under this Agreement shall also be sent to the Notes Collateral Agent. Unless otherwise specifically provided herein, any notice hereunder shall be in writing and may be per-sonally served or sent by telefacsimile (except in the case of the Notes Collateral Agent) or United States mail or courier service or electronic mail (in pdf format) and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsim-ile or electronic mail (in pdf format), or 3 Business Days after depositing it in the United States mail with postage prepaid and properly addressed. For the purposes hereof, the addresses of the parties hereto shall be as is set forth on Annex 1 hereto. The Notes Collateral Agent shall provide written notice to the First Lien Credit Facility Agent of the Discharge of Notes Obligations and the First Lien Credit Facility Agent shall provide written notice to the Notes Collateral Agent of the Discharge of First Lien Obligations.
9.8. Further Assurances. The Notes Collateral Agent agrees to take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the First Lien Credit Facility Agent may reasonably request to effectuate the terms of and the Lien priori-ties contemplated by this Agreement, all at the expense of Grantors.
9.9. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
9.10. Binding on Successors and Assigns. This Agreement shall be binding upon the First Lien Credit Facility Agent, the First Lien Credit Facility Claimholders, the Notes Collateral Agent, the Notes Claimholders, and their respective successors and assigns.
9.11. Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any sub-stantive effect.
9.12. Counterparts. 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. Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.
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9.13. No Third Party Beneficiaries. This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of and bind each of the First Lien Credit Facility Claimholders and the Notes Claimholders. Other than for purposes of Sections 2.4(b), 4.4, 5.1, 5.2, 5.3, 5.4, 5.5, 6.2, 7.3(b) and 9.3, in no event shall any Grantor be a third party beneficiary of this Agreement.
9.14. Provisions Solely to Define Relative Rights. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders on the one hand and the Notes Collateral Agent and the Notes Claimholders on the other hand. Other than for purposes of Sections 4.5, 5.1, 5.2, 5.3, 5.4, 5.5, 6.2, 7.3(b) and 9.3, no Grantor or any other creditor thereof shall have any rights hereunder and no Grantor may rely on the terms hereof. Nothing in this Agreement shall impair, as between the Grantors and the First Lien Credit Facility Agent and the First Lien Credit Facility Claimholders, or as between the Gran-tors and the Notes Collateral Agent and the Notes Claimholders, the obligations of the Grantors to pay principal, interest, fees and other amounts as provided in the First Lien Credit Facility Documents and the Notes Documents, respectively. The parties hereto acknowledge that the Notes Collateral Agent will also enter into an intercreditor agreement or agreements, as may be required, that will govern the lien priorities in the Collateral between the Notes Claimholders.
9.15. Specific Performance. The First Lien Credit Facility Agent may demand specific per-formance of this Agreement. The Notes Collateral Agent, on behalf of itself and the Notes Claimholders, hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by the First Lien Credit Facility Agent or the other First Lien Credit Facility Claimholders. Without lim-iting the generality of the foregoing or of the other provisions of this Agreement, in seeking specific per-formance in any Insolvency Proceeding, the First Lien Credit Facility Agent may seek such or any other relief as if it were the “holder” of the claims of the Notes Claimholders under Section 1126(a) of the Bankruptcy Code or other applicable law or otherwise had been granted an irrevocable power of attorney by the Notes Claimholders.
9.16. Indenture Protections and Rights. In connection with its execution and acting under this Agreement, the Notes Collateral Agent is entitled to all rights, privileges, protections, immunities, bene-fits and indemnities provided to it and the Trustee under the Indenture, all of which are incorporated by reference herein mutatis mutandis in addition to any such rights, privileges, protections, immunities, ben-efits and indemnities contained herein. In the administration of this Agreement and performance of its powers hereunder, the Notes Collateral Agent shall not be required to act hereunder unless it shall have received appropriate direction from the applicable holders of Notes, as provided in the Indenture and the other Notes Documents.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
[ ] as First Lien Credit Facility Agent
By: Name: Title:
By: Name: Title:
THE BANK OF NEW YORK MELLON, as Notes U.S. Collateral Agent
By: Name: Title:
BNY TRUST COMPANY OF CANADA, as Notes Canadian Collateral Agent
By: Name: Title:
ACKNOWLEDGMENT
Each of the undersigned hereby acknowledges that it has received a copy of the foregoing Inter-creditor Agreement and consents thereto, agrees to recognize all rights granted thereby to the First Lien Credit Facility Agent , the First Lien Credit Facility Claimholders, the Notes Collateral Agent and the Notes Claimholders, and will not do any act or perform any obligation which is not in accordance with the agreements set forth therein. Each of the undersigned further acknowledges and agrees that it is not an intended beneficiary or third party beneficiary under the foregoing Intercreditor Agreement.
ACKNOWLEDGED AS OF THE DATE FIRST WRITTEN ABOVE:
AINSWORTH LUMBER CO. LTD.
By: Name: Title:
AINSWORTH ENGINEERED CORP.
By: Name: Title:
AINSWORTH GP LTD.
By: Name: Title:
0737562 B.C. LTD.
By: Name: Title:
AINSWORTH ENGINEERED CANADA LIMITED PARTNERSHIP
by its General Partners, Ainsworth GP Ltd.
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By: Name: Title:
AINSWORTH CORP.
By: Name: Title:
FOOTNER FOREST PRODUCTS LTD.
By: Name: Title:
ANNEX 1
Notice Addresses
(a) if to any Grantor, c/o: Ainsworth Lumber Co. Ltd., Suite 3194 Bentall 4 1055 Dunsmuir Street PO Box 49307 Vancouver, BC Canada V7X 1L3
(b) if to the First Lien Credit Facility Agent, at: [ ] [ ] [ ] Attn: [ ] Telecopy: [ ] Email: [ ] With a copy (which shall not constitute notice) to: [ ] [ ] Attention: [ ] Email: [ ] Telephone No.: [ ] Telecopier No.: [ ]
(c) if to the Notes U.S. Collateral Agent, at: The Bank of New York Mellon, as Collateral Agent 101 Barclay Street, Floor 4E New York, New York 10286 Attn: International Corporate Trust Email: [ ] Telecopier No.: [ ]
(d) if to the Notes Canadian Collateral Agent, at:
BNY Trust Company of Canada, as Collateral Agent [ ] [ ] Attn: [ ] Email: [ ] Telecopier No.: [ ]
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With a copy (which shall not constitute notice) to: [ ] [ ] Attention: [ ] Email: [ ] Telephone No.: [ ] Telecopier No.: [ ]
[EXHIBIT A TO THE INTERCREDITOR AGREEMENT
[Form of]
JOINDER AGREEMENT
[Name of Pari Passu Lien Agent] [Address of Pari Passu Lien Agent]
[Date]
[Names of First Lien Credit Facility Agent , Notes U.S. Collateral Agent and Notes Canadian Collateral Agent] [Addresses of First Lien Credit Facility Agent , Notes U.S. Collateral Agent and Notes Canadian Collat-eral Agent ]
The undersigned, together with its successors and assigns (the “New Secured Agent”) under [identify agreement governing Pari Passu Lien Indebtedness] (the “New Secured Agreement”), is the Pari Passu Lien Agent for Persons (the “New Secured Claimholders”) wishing to become Notes Claimholders under and as defined in the Intercreditor Agreement dated as of [ ] (as amended and/or supple-mented from time to time, the “Intercreditor Agreement” (terms used without definition herein have the meanings assigned to such terms by the Intercreditor Agreement)) among [ ], in its capacity as collateral agent under the First Lien Credit Facility Documents, including its successors and assigns in such capacity from time to time (“First Lien Credit Facility Agent”), The Bank of New York Mellon, in its capacity as U.S. collateral agent under the Indenture and Notes Collateral Documents, including its successors and assigns in such capacity from time to time (“Notes U.S. Collateral Agent”) and BNY Trust Company of Canada, in its capacity as Canadian collateral agent under the Indenture and Notes Collateral Documents, including its successors and assigns in such capacity from time to time (“Notes Canadian Collateral Agent” and together with the Notes U.S. Collateral Agent, the “Notes Collateral Agent”).
In consideration of the foregoing, the undersigned hereby:
(i) represents that pursuant to a joinder to the Notes Security Agreement, the New Secured Claimholders have authorized the Notes Collateral Agent to act as the agent on behalf of such New Secured Claimholders under the Intercreditor Agreement and the Notes Collateral Agent has accepted such authorization;
(ii) acknowledges that the New Secured Agent has received a copy of the Intercredi-tor Agreement;
(iii) acknowledges on behalf of itself and the other New Secured Claimholders that the obligations under the New Secured Agreement constitute Notes Obligations for all purposes of the Intercreditor Agreement; and
(iv) accepts and acknowledges the terms of the Intercreditor Agreement applicable to the New Secured Agent, the New Secured Claimholders and the other Notes Claimholders and agrees on its own behalf and on behalf of the New Secured Claimholders to be bound by the terms thereof applicable to holders of Notes Obligations, with all the rights, duties and obligations of the Notes Claimholders under the Intercreditor Agreement and to be bound by all the provi-sions thereof as fully as if they had been named as Notes Claimholders on the effective date of the
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Intercreditor Agreement and agrees that the New Secured Agent’s address for receiving notices pursuant to the Intercreditor Agreement shall be as follows:
[Address]
THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CON-STRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly execut-ed by its authorized officer as of the ___ day of 20__.
[NAME OF NEW SECURED AGENT]
By: Name: Title:
The Company hereby represents and warrants to the First Lien Credit Facility Agent, the Notes U.S Collateral Agent, the Notes Cana-dian Collateral Agent and each Pari Passu Lien Agent on the date hereof that the New Secured Agreement meets the requirements set forth in the definition of Pari Passu Lien Indebtedness and is permitted or not prohibit-ed from being incurred pursuant to the terms of the Indenture and the First Lien Credit Fa-cility.
Ainsworth Lumber Co. Ltd., a corporation existing under the federal laws of Canada
By:_________________________________ Name: Title:
