EX-10.1.7 5 d70382dex1017.htm EX-10.1.7 EX-10.1.7

Exhibit 10.1.7

FIRST AMENDMENT

FIRST AMENDMENT (this “First Amendment”), dated as of [•], 2021, among CORE & MAIN LP, a Florida limited partnership (the “Borrower”), the several banks and financial institutions parties hereto and the Administrative Agent (as defined below).

W I T N E S S E T H:

WHEREAS, the Borrower has entered into that certain Credit Agreement, dated as of August 1, 2017 (as amended by the Lender Joinder Agreement, dated as of July 8, 2019, and as further amended, supplemented, waived or otherwise modified from time to time prior to the First Amendment Effective Date (as defined in Section 5(a) hereof), the “Existing Credit Agreement”; the Existing Credit Agreement, as amended pursuant to the Refinancing Amendments (as defined below), the “Refinanced Credit Agreement”; the Refinanced Credit Agreement, as amended pursuant to the Elective Amendments (as defined below), the “Initial Amended Credit Agreement”; the Initial Amended Credit Agreement, as amended pursuant to the Incremental Amendments (as defined below), the “Credit Agreement”), among the Borrower, the several banks and other financial institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent (in such capacity, the “Collateral Agent”);

WHEREAS, pursuant to and in accordance with Subsection 2.11 of the Existing Credit Agreement, the Borrower has requested that Specified Refinancing Term Loans in an aggregate principal amount of $1,257,806,472.08 be made available to the Borrower, and the Tranche B Term Lenders (as defined in Section 2(c)(i) hereof) and the Administrative Agent have agreed, upon the terms and subject to the conditions set forth herein, (a) that each Tranche B Term Lender with a Tranche B Term Loan Commitment (as defined in Section 2(c)(i) hereof) will make Specified Refinancing Term Loans in the form of Tranche B Term Loans (as defined in Section 2(c)(i) hereof) in the amount of such Tranche B Term Loan Commitment, (b) that the proceeds of the Tranche B Term Loans provided by the New Tranche B Term Lenders (as defined in Section 2(c)(i) hereof), together with the proceeds of the Supplemental Term Loans (as defined below), will be used to (i) repay the Initial Term Loans outstanding on the date hereof that are not exchanged for Tranche B Term Loans pursuant to this First Amendment, (ii) to repay the Senior Notes, the Senior Add-on Notes and the Topco PIK Notes (each as defined in the Credit Agreement) and/or (iii) to pay fees, costs and expenses incurred in connection with the foregoing and (c) to amend the Existing Credit Agreement to the extent necessary or appropriate, in the opinion of the Borrower and the Administrative Agent, to effect the Incurrence of the Tranche B Term Loans (such amendments, the “Refinancing Amendments”);

WHEREAS, certain Lenders holding Initial Term Loans (each, an “Existing Term Lender” and, collectively, the “Existing Term Lenders”) have elected, and the Borrower has agreed, to either (i) exchange (by exercising a cashless rollover option pursuant to Subsection 4.4(g) of the Existing Credit Agreement) their Initial Term Loans for Tranche B Term Loans and/or (ii) have their Initial Term Loans repaid, in each case, on the First Amendment Effective Date (as defined in Section 2(c)(i) hereof) by executing and delivering a Lender Signature Page to First Amendment in the form attached as Exhibit A hereto (an “Existing Lender Signature Page”);


WHEREAS, the Tranche B Term Lenders constitute the Required Lenders under the Refinanced Credit Agreement upon the First Amendment Effective Date after giving effect to the incurrence of Tranche B Term Loans and the repayment of Initial Term Loans outstanding on the date hereof that are not exchanged for Tranche B Term Loans pursuant to this First Amendment, and pursuant to and in accordance with Subsection 11.1(a) of the Refinanced Credit Agreement, each of the Tranche B Term Lenders and the Administrative Agent have agreed to amend the Refinanced Credit Agreement as set forth in Section 3 hereof (such amendments, the “Elective Amendments”);

WHEREAS, pursuant to and in accordance with Subsection 2.8 of the Initial Amended Credit Agreement, the Borrower has requested that the Persons set forth in Schedule A hereto (each, an “Incremental Term Lender”) make term loan commitments in an aggregate amount of $242,193,527.92 (the “Term Loan Commitment Increase”) to the Borrower on the First Amendment Effective Date, in each case subject to the terms and conditions set forth herein;

WHEREAS, each Incremental Term Lender and the Administrative Agent have agreed, upon the terms and subject to the conditions set forth herein and in the Initial Amended Credit Agreement, that each Incremental Term Lender will make its Supplemental Term Commitment (as defined below) in an aggregate amount not to exceed the amount set forth opposite such Incremental Term Lender’s name in Schedule A hereto (as to each such Incremental Term Lender, its “Supplemental Term Commitment”; term loans made by each Incremental Term Lender in respect thereof, its “Supplemental Term Loans”);

WHEREAS, pursuant to and in accordance with Subsection 2.8(c) of the Initial Amended Credit Agreement, the Borrower and the Incremental Term Lenders agree to amend the Initial Amended Credit Agreement as set forth in Section 4 hereof (such amendments, the “Incremental Amendments”), subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Defined Terms. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

SECTION 2. Agreements and Amendment of the Credit Agreement.

(a) Establishment of Tranche B Term Loans.

(i) The Tranche B Term Loans extended by the New Tranche B Term Lenders shall be deemed to be “Specified Refinancing Term Loans”, the New Tranche B Term Lenders shall be deemed to be “Specified Refinancing Lenders”, the Tranche B Term Loans representing the Original Initial Term Loans exchanged by the Existing Term Lenders by

 

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exercising a cashless rollover option pursuant to Subsection 4.4(g) of the Credit Agreement shall be deemed to be “Rollover Indebtedness” and Section 2 of this First Amendment shall be deemed to be a “Specified Refinancing Amendment” and a “Loan Document”, in each case, for all purposes of the Credit Agreement, as amended by this First Amendment, and the other Loan Documents. The Borrower and the Administrative Agent hereby consent, pursuant to Subsections 11.6(b)(i) and 2.11(b) of the Credit Agreement, to the inclusion as an “Additional Specified Refinancing Lender” of each New Tranche B Term Lender that is party to this First Amendment that is not an existing Lender, an Affiliate of an existing Lender or an Approved Fund.

(b) Certain Agreements.

(i) Each Exchanging Term Lender hereby waives any right to receive any payments under Subsection 4.12 of the Credit Agreement as a result of the Tranche B Effective Date Transactions. It is understood and agreed that the Borrower, with the consent of the Administrative Agent, may elect on or prior to the First Amendment Effective Date that the Tranche B Term Loans for which the Original Initial Term Loans are exchanged be Eurodollar Loans having an Interest Period designated by the Borrower, regardless of whether the First Amendment Effective Date is the last day of an Interest Period with respect to such exchanged Original Initial Term Loans.

(ii) The Borrower hereby agrees that it shall, together with any prepayment of the Original Initial Term Loans pursuant to this First Amendment, pay to the Existing Term Lenders, on the First Amendment Effective Date, accrued and unpaid interest to the First Amendment Effective Date on the amount of Original Initial Term Loans prepaid or exchanged pursuant to this First Amendment.

(iii) The parties hereto acknowledge and agree that the making of the Tranche B Term Loan Commitments, the funding of (or exchange of Initial Term Loans in lieu thereof for) the Tranche B Term Loans and the amendments to the Existing Credit Agreement effectuated by this First Amendment, shall occur in such order and such manner as set forth herein, except to the extent that the Existing Credit Agreement, the Refinanced Credit Agreement, the Initial Amended Credit Agreement or the Credit Agreement, as applicable, may otherwise so require in order to make such amendments effective or to consummate the Tranche B Effective Date Transactions, in which event they shall occur in such order or manner as shall be so required.

 

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(c) Initial Amendments. Effective as of the First Amendment Effective Date upon the occurrence of the Refinancing Amendments Effective Time, the Credit Agreement is hereby amended as follows:

 

 

(i)

by adding the following new definitions to Subsection 1.1 of the Credit Agreement, to appear in proper alphabetical order:

““Exchange Agreement”: the Exchange Agreement, dated as of the [First Amendment Effective Date], by and among Pubco, Topco and holders of Capital Stock in Topco from time to time party thereto, pursuant to which, among other things, such holders may exchange Capital Stock in Topco and Capital Stock in Pubco for Capital Stock in Pubco, as the same may be amended, supplemented, waived or otherwise modified from time to time.

Exchanging Term Lender”: as defined in Subsection 2.1(c)(ii).

Existing Term Lenders”: those Lenders holding an Original Initial Term Loan immediately prior to the First Amendment Effective Date.

First Amendment”: the First Amendment, dated as of [•], 2021, by and among the Borrower, the Lenders party thereto and the Administrative Agent.

First Amendment Effective Date”: [•], 2021.

New Tranche B Term Lenders”: as defined in Subsection 2.1(c)(i).

New Tranche B Term Loan”: as defined in Subsection 2.1(c)(i).

Non-Exchanging Term Lender”: as defined in Subsection 2.1(c)(ii).

Original Initial Term Loan”: as defined in Subsection 2.1(a).

Original Initial Term Loan Commitment”: as to any Lender, its obligation to make Original Initial Term Loans to the Borrower pursuant to Subsection 2.1(a) in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A under the heading “Original Initial Term Loan Commitment”; collectively, as to all the Lenders, the “Original Initial Term Loan Commitments”. The original aggregate amount of the Original Initial Term Loan Commitments on the Closing Date is $1,075,000,000.

Original Initial Term Loan Maturity Date”: August 1, 2024.

Pubco”: Core & Main, Inc., a Delaware corporation, and any successor in interest thereto.

Pubco IPO”: the Qualified IPO of Pubco relating to Pubco’s registration statement on Form S-1 (Registration No. 333-256382).

Pubco Mergers”: collectively, (i) the merger of WW Advisor with and into Pubco, with Pubco being the survivor of such merger and (ii) the merger of New Blocker with and into Pubco, with Pubco being the survivor of such merger.

 

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Reorganization Agreement”: the Reorganization Agreement, dated as of [•], 2021, by and among Topco, Pubco, Management Holdings, Waterworks Holdings, certain CD&R Investors and other parties set forth in the preamble thereto, as the same may be amended, supplemented, waived or otherwise modified from time to time.

Senior Add-on Notes”: Additional 6.125% Senior Notes due 2025 of the Borrower issued on June 5, 2020, as the same may be exchanged for substantially similar senior notes that have been registered under the Securities Act, and as the same or such substantially similar notes may be amended, supplemented, waived or otherwise modified from time to time in accordance with this Agreement.

Topco PIK Notes”: 8.625%/9.375% Senior PIK Toggle Notes due 2024 of Topco issued on September 16, 2019, as the same may be exchanged for substantially similar senior PIK toggle notes that have been registered under the Securities Act, and as the same or such substantially similar notes may be amended, supplemented, waived or otherwise modified from time to time.

Tranche B Effective Date Transactions”: collectively, any or all of the following (whether taking place prior to, on or following the First Amendment Effective Date): (i) the entry into the Reorganization Agreement and the Exchange Agreement and the consummation of the transactions contemplated thereby[, including those transactions described under the caption “The Reorganization Transactions” in the prospectus, dated [•], 2021, relating to Pubco’s registration statement on Form S-1 (Registration No. 333-256382) in the form filed with the SEC pursuant to Rule 424(b) under the Securities Act (including the Pubco Merger Sub Mergers and the Pubco Mergers)], (ii) the Pubco IPO, resulting in Pubco issuing certain equity interests of Pubco being listed on a nationally recognized stock exchange in the U.S., (iii) the entry into the First Amendment and Incurrence of Tranche B Term Loans (including via an exchange of the Original Initial Term Loans for Tranche B Term Loans) thereunder, (iv) the entry into Amendment No. 3 to the Senior ABL Facility and any Incurrence of Indebtedness thereunder on the First Amendment Effective Date, (v) the repayment of the Original Initial Term Loans held by the Non-Exchanging Term Lenders or exchange by the Exchanging Term Lenders of the Original Initial Term Loans through a cashless rollover pursuant to Subsection 4.4(g), (vi) the repayment of the Senior Notes, the Senior Add-on Notes and the Topco PIK Notes, and (vii) all other transactions relating to any of the foregoing (including payment of fees, premiums and expenses related to any of the foregoing).

 

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Tranche B Installment Date”: as defined in Subsection 2.2(b)(ii).

Tranche B Term Lender”: any Lender having a Tranche B Term Loan Commitment and/or a Tranche B Term Loan outstanding hereunder.

Tranche B Term Loan”: as defined in Subsection 2.1(b)(i).

Tranche B Term Loan Commitment”: as to any Lender, its obligation to make Tranche B Term Loans to the Borrower pursuant to Subsection 2.1(b) in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A-1 under the heading “Tranche B Term Loan Commitment” or, in the case of any Lender that is an Assignee, the amount of the assigning Lender’s Tranche B Term Loan Commitment assigned to such Assignee pursuant to Subsection 11.6(b) (in each case as such amount may be adjusted from time to time as provided herein); collectively, as to all the Lenders, the “Tranche B Term Loan Commitments”. The original aggregate amount of the Tranche B Term Loan Commitments on the First Amendment Effective Date, immediately after giving effect to the First Amendment, is $1,500,000,000.

Tranche B Term Loan Maturity Date”: [•], 2028.1

 

 

(ii)

by amending and restating the following definitions in their entirety appearing in Subsection 1.1 of the Credit Agreement as follows:

““Extension of Credit”: as to any Lender, the making of an Original Initial Term Loan (excluding any Supplemental Term Loans being made under the Original Initial Term Loan Tranche), a Tranche B Term Loan (excluding any Supplemental Term Loans being made under the Tranche B Term Loan Tranche) or an Incremental Revolving Loan (other than the initial extension of credit thereunder).

Facility”: each of (a) the Original Initial Term Loan Commitments and the Extensions of Credit made thereunder (the “Initial Term Loan Facility”), (b) the Tranche B Term Loan Commitments and the Extensions of Credit made thereunder, (c) Incremental Term Loans of the same Tranche, (d) Incremental Revolving Commitments of the same Tranche and Extensions of Credit made thereunder, (e) any Extended Term Loans of the same Extension Series and (f) any Specified Refinancing Term Loans of the same Tranche (other than Tranche B Term Loans), and collectively the “Facilities.”

 

1 

NTD. To be seven years after the First Amendment Effective Date.

 

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Initial Term Loan”: collectively, the Original Initial Term Loans and the Tranche B Term Loans.

Initial Term Loan Commitment”: as to any Lender, the Original Initial Term Loan Commitment (if any) and the Tranche B Term Loan Commitment (if any).

Initial Term Loan Maturity Date”: (a) prior to the First Amendment Effective Date, the Original Initial Term Loan Maturity Date and (b) from and after the First Amendment Effective Date, the Tranche B Term Loan Maturity Date.

Tranche”: (i) with respect to Term Loans or commitments, refers to whether such Term Loans or commitments are (1) Original Initial Term Loans or Original Initial Term Loan Commitments, (2) Tranche B Term Loans or Tranche B Term Loan Commitments, (3) Incremental Loans or Incremental Term Loan Commitments with the same terms and conditions made on the same day and any Supplemental Term Loans added to such Tranche pursuant to Subsection 2.8, (4) Extended Term Loans (of the same Extension Series) or (5) Specified Refinancing Term Loan Facilities with the same terms and conditions made on the same day and any Supplemental Term Loans added to such Tranche pursuant to Subsection 2.8 (excluding Tranche B Term Loans and Tranche B Term Loan Commitments) and (ii) with respect to Revolving Loans or commitments, refers to whether such Revolving Loans or commitments are Incremental Revolving Commitments or Incremental Revolving Loans with the same terms and conditions made on the same day pursuant to Subsection 2.8.”;

 

 

(iii)

by amending the definition of “Adjusted LIBOR Rate” by (x) replacing the reference to “Initial Term Loans” therein with “Original Initial Term Loans”, (y) adding “(x)” at the beginning of clause (ii) therein and (z) adding “, and (y) solely with respect to the Tranche B Term Loans, 0.00%” at the end of clause (ii) thereof;

 

 

(iv)

by amending the definition of “Applicable Margin” by (x) replacing each reference to “Initial Term Loans” therein with “Original Initial Term Loans”, (y) adding “(a)” immediately after the phrase “in respect of” in the first sentence thereof and (z) adding “, and (b) Tranche B Term Loans (i) with respect to ABR Loans, 1.50% per annum, and (ii) with respect to Eurodollar Loans, 2.50% per annum” at the end of the first sentence thereof;

 

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(v)

by amending the definition of “Pricing Grid” by replacing the reference to “Initial Term Loans” therein with “Original Initial Term Loans”;

 

 

(vi)

by amending and restating in its entirety Subsection 2.1(a) of the Credit Agreement as follows:

“(a) Subject to the terms and conditions hereof, each Lender holding an Original Initial Term Loan Commitment severally agrees to make, in Dollars, in a single draw on the Closing Date, one or more term loans (each, an “Original Initial Term Loan”) to the Borrower in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name in Schedule A under the heading “Original Initial Term Loan Commitment”, as such amount may be adjusted or reduced pursuant to the terms hereof, which Original Initial Term Loans:

(i) except as hereinafter provided, shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, ABR Loans or Eurodollar Loans; and

(ii) shall be made by each such Lender in an aggregate principal amount which does not exceed the Original Initial Term Loan Commitment of such Lender.

Without limitation of Subsections 2.8 and 8.1(b)(i), once repaid, Original Initial Term Loans incurred hereunder may not be reborrowed. On the Closing Date (after giving effect to the incurrence of Original Initial Term Loans on such date), the Original Initial Term Loan Commitments of each Lender shall terminate.”;

 

 

(vii)

by amending Subsection 2.1 of the Credit Agreement to add a new subclause (b) as follows:

“(b) (i) Subject to the terms and conditions hereof, each Lender listed on Schedule A-1 under the heading “Tranche B Term Loan Commitment” attached hereto (the “New Tranche B Term Lenders”) severally agrees to make, in Dollars, in a single draw on the First Amendment Effective Date, one or more term loans (each, a “New Tranche B Term Loan” and, collectively with the term loans representing the Original Initial Term Loans exchanged by the Existing Term Lenders by exercising a cashless rollover pursuant to Subsection 4.4(g), the “Tranche B Term Loans”) to the Borrower in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name in Schedule A-1 under the heading “Tranche B Term Loan Commitment”, as such amount may be adjusted or reduced pursuant to the terms hereof; provided that Exchanging Term Lenders shall make their respective Tranche B Term Loans by exchanging their Original Initial Term Loans for Tranche B Term Loans constituting Rollover Indebtedness in lieu of their pro rata portion of the prepayment of Original Initial Term Loans pursuant to Subsection 4.4(g).

 

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(ii) Subject to the terms and conditions hereof, on the First Amendment Effective Date, upon execution of the First Amendment by an Existing Term Lender and the indication on such Lender’s signature page that such Existing Term Lender elects to exchange, through a cashless rollover pursuant to Subsection 4.4(g), all of such Lender’s Original Initial Term Loans for Tranche B Term Loans (each such Existing Term Lender, an “Exchanging Term Lender”, and each Existing Term Lender other than an Exchanging Lender, a “Non-Exchanging Term Lender”), the amount of Original Initial Term Loans held by such Exchanging Term Lender (or such lesser amount allocated to such Lender by the Administrative Agent) shall be exchanged for Tranche B Term Loans. For the avoidance of doubt, such Tranche B Term Loans held by an Exchanging Term Lender shall constitute “Rollover Indebtedness” for all purposes under this Agreement.

(iii) The Tranche B Term Loans, except as hereinafter provided, shall, at the option of the Borrower be incurred and maintained as, and/or converted into, ABR Loans or Eurodollar Loans.

Without limitation of Subsections 2.8 and 8.1(b)(i), once repaid, Tranche B Term Loans incurred hereunder may not be reborrowed. On the First Amendment Effective Date (after giving effect to the incurrence of Tranche B Term Loans on such date), the Tranche B Term Loan Commitments of each Tranche B Term Lender shall terminate.”;

 

 

(viii)

by amending and restating in its entirety Subsection 2.2(a) of the Credit Agreement as follows:

(a) The Borrower agrees that, upon the request to the Administrative Agent by any Lender made on or prior to the Closing Date (in the case of requests relating to Loans other than the Tranche B Term Loans) or the First Amendment Effective Date (in the case of requests relating to the Tranche B Term Loans) or in connection with any assignment pursuant to Subsection 11.6(b), in order to evidence such Lender’s Loan, the Borrower shall execute and deliver to such Lender a promissory note substantially in the form of Exhibit A (each, as amended, supplemented, replaced or otherwise modified from time to time, a “Note”, and, collectively, the “Notes”), in each case with appropriate insertions therein as to payee, date and principal amount, payable to such Lender and in a principal amount equal to the unpaid principal amount of the applicable Loans made (or acquired by assignment pursuant to Subsection 11.6(b))

 

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by such Lender to the Borrower. Each Note shall be dated the Closing Date; provided, that each Note in respect of a Tranche B Term Loan shall be dated the First Amendment Effective Date. Each Note shall be payable as provided in Subsection 2.2(b) and provide for the payment of interest in accordance with Subsection 4.1.

 

 

(ix)

by amending Subsection 2.2(b) of the Credit Agreement to (x) designate Subsection 2.2(b) as a new subclause (i), (y) replace each reference to “Initial Term Loans” with “Original Initial Term Loans” and (z) replace each reference to “Initial Term Loan Maturity Date” with “Original Initial Term Loan Maturity Date”;

 

 

(x)

by amending Subsection 2.2(b) of the Credit Agreement to add a new subclause (ii) as follows:

“(ii) The Tranche B Term Loans of all the Lenders shall be payable in consecutive quarterly installments beginning on [•]2, 2021 up to and including the Tranche B Term Loan Maturity Date (subject to reduction as provided in Subsection 4.4), on the dates (each such date, a “Tranche B Installment Date”) and in the principal amounts, subject to adjustment as set forth below, equal to the respective amounts set forth below (together with all accrued interest thereon) opposite the applicable Tranche B Installment Dates (or, if less, the aggregate amount of such Tranche B Term Loans then outstanding):

 

   

Date

  

Amount

    
 

The last Business Day of each Fiscal Quarter ending prior to the Tranche B Term Loan Maturity Date

  

0.25% of the aggregate initial principal amount of the Tranche B Term Loans on the First Amendment Effective Date

  
 

Tranche B Term Loan Maturity Date

  

All unpaid aggregate principal amounts of any outstanding Tranche B Term Loans

  

 

 

”;

 

 

(xi)

by amending Subsection 2.3 of the Credit Agreement by adding the words “or the First Amendment Effective Date, as applicable,” after the words “Closing Date” in the first and third sentences thereof;

 

 

2 

NTD. To be the last Business Day of the first full Fiscal Quarter ending after the First Amendment Effective Date.

 

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(xii)

by amending Subsection 4.4(a) of the Credit Agreement by (x) replacing the reference to “Initial Term Loans” in the last sentence thereof with “Original Initial Term Loans” and (y) inserting the following as the new last sentence thereof:

“Each prepayment of Tranche B Term Loans pursuant to this Subsection 4.4(a) made prior to the date that is six months after the First Amendment Effective Date in an amount equal to the Net Cash Proceeds received by the Borrower or any Restricted Subsidiary from its incurrence of new Indebtedness under first lien secured bank financing in a Repricing Transaction shall be accompanied by the payment of the fee required by Subsection 4.5(b)(ii).”;

 

 

(xiii)

by amending Subsection 4.4(e) of the Credit Agreement by inserting the following new sentence before the last sentence thereof:

“Each prepayment of Tranche B Term Loans pursuant to this Subsection 4.4(e)(ii)(A), but not any other prepayment of Tranche B Term Loans pursuant to Subsection 4.4(e) made prior to the date that is six months after the First Amendment Effective Date in an amount equal to the Net Cash Proceeds received by the Borrower or any Restricted Subsidiary from its incurrence of new Indebtedness under first lien secured bank financing in a Repricing Transaction shall be accompanied by the payment of the fee required by Subsection 4.5(b)(ii).”

 

 

(xiv)

by amending Subsection 4.5(b)(i) of the Credit Agreement to replace each reference to “Initial Term Loans” with “Original Initial Term Loans”;

 

 

(xv)

by amending Subsection 4.5(b) of the Credit Agreement to add a new subclause (ii) as follows:

“(ii) If, prior to the date that is six months after the First Amendment Effective Date, the Borrower makes an optional prepayment or mandatory prepayment pursuant to Subsection 4.4(e)(ii)(A) of all or a portion of the Tranche B Term Loans in an amount equal to the Net Cash Proceeds received by the Borrower or any Restricted Subsidiary from its incurrence of new Indebtedness under first lien secured bank financing in a Repricing Transaction, the Borrower shall pay to the Administrative Agent, for the ratable account of each Lender, a prepayment premium of 1.0% of the aggregate principal amount of Tranche B Term Loans being prepaid. If,

 

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prior to the date that is six months after the First Amendment Effective Date, any Lender is replaced pursuant to Subsection 11.1(g) in connection with any amendment of this Agreement (including in connection with any refinancing transaction permitted under Subsection 11.6(g) to replace the Tranche B Term Loans) that results in a Repricing Transaction, such Lender (and not any Person who replaces such Lender pursuant to Subsection 2.10(e) or 11.1(g)) shall receive a fee equal to 1.0% of the principal amount of the Tranche B Term Loans of such Lender assigned to a replacement Lender pursuant to Subsection 2.10(e) or 11.1(g).”;

 

 

(xvi)

by amending Subsection 5.16 of the Credit Agreement by (x) replacing the reference to “Initial Term Loans” in clause (i) of the first sentence thereof with “Original Initial Term Loans”, (y) deleting the reference to “and (ii)” in the first sentence thereof and replacing it with “, (ii) in the case of the Tranche B Term Loans, to effect, in part, the Tranche B Effective Date Transactions, and to pay certain fees, premiums and expenses relating thereto and (iii)” and (z) adding the words “other than those described in clauses (i) and (ii),” after the words “other Term Loans,”;

 

 

(xvii)

by amending Subsection 11.2(a) of the Credit Agreement by deleting the reference to “Schedule A” and replacing it with “Schedules A and A-1”; and

 

 

(xviii)

by amending the Schedules to the Credit Agreement by (x) amending Schedule A by deleting the reference to “Initial Term Loan Commitment” therein and replacing it with “Original Initial Term Loan Commitment” and (y) adding Annex I hereto as new Schedule A-1.

SECTION 3. Further Amendments.

(a) Pursuant to and in accordance with Subsection 11.1(a) of the Credit Agreement, effective as of the Elective Amendments Effective Time, the Existing Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Initial Amended Credit Agreement attached as Exhibit B hereto, which such Initial Amended Credit Agreement shall supersede the Existing Credit Agreement and the Refinanced Credit Agreement.

SECTION 4. Increase Supplement.

(a) This Section 4 of this First Amendment constitutes an Increase Supplement pursuant to Subsection 2.8(c) of the Initial Amended Credit Agreement.

 

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(b) The Supplemental Term Loans made by each Incremental Term Lender are hereby established as and shall constitute “Supplemental Term Loans” and the Supplemental Term Loan Commitments made by each Incremental Term Lender are hereby established as and shall constitute “Supplemental Term Loan Commitments”, in each case pursuant to Subsection 2.8 of the Initial Amended Credit Agreement.

SECTION 5. Conditions Precedent to Effectiveness.

(a) Effectiveness of Refinancing Amendments. The effectiveness of the Refinancing Amendments, including the obligation of each Tranche B Term Lender to make, or exchange its Original Initial Term Loan for, a Tranche B Term Loan, shall become effective on the date (the “First Amendment Effective Date”) and at the time (the “Refinancing Amendments Effective Time”) on and at which each of the following conditions is satisfied or waived:

(i) Amendment. The Administrative Agent shall have received the following, each of which shall be originals or facsimiles or “.pdf” or “tiff” files unless otherwise specified, each dated as of the First Amendment Effective Date:

 

 

(i)

this First Amendment executed and delivered by a duly authorized officer of the Borrower, each Tranche B Term Lender (which, in the case of Tranche B Term Lenders, may be in the form of an Existing Lender Signature Page) and each Incremental Term Lender; and

 

 

(ii)

the Acknowledgment and Consent attached to this First Amendment (the “Acknowledgment”), executed by each Guarantor.

(ii) Legal Opinions. The Administrative Agent shall have received the following executed legal opinions, each in form and substance reasonably satisfactory to the Administrative Agent:

 

 

(i)

executed legal opinion of Debevoise & Plimpton LLP, counsel to the Borrower and the other Loan Parties; and

 

 

(ii)

executed legal opinion of Holland & Knight LLP, special Florida counsel to certain of the Loan Parties.

(iii) Officer’s Certificate. The Administrative Agent shall have received a certificate from the Borrower, dated the First Amendment Effective Date, certifying the satisfaction of the conditions set forth in clauses (vi) and (vii) below.

 

13


(iv) Fees. JPMorgan Chase Bank, N.A., Citigroup Global Markets Inc., Bank of America, N.A., Barclays Bank PLC, Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Goldman Sachs Bank USA, Truist Securities, Inc., US Bank National Association, Credit Suisse Loan Funding LLC, Natixis, New York Branch, Nomura Securities International, Inc., Commerce Bank and Citizens Bank, N.A., each as a joint lead arranger and bookrunner in connection with the First Amendment, and the Administrative Agent shall have received all fees related to this First Amendment payable to them to the extent due (which may be offset against the proceeds of the Tranche B Term Loans).

(v) Secretary’s Certificate. The Administrative Agent shall have received a certificate from the Borrower, dated the First Amendment Effective Date, substantially in the form of Exhibit F to the Credit Agreement, with appropriate insertions and attachments of resolutions or other actions, evidence of incumbency and the signature of authorized signatories and Organizational Documents, executed by a Responsible Officer and the Secretary or any Assistant Secretary or other authorized representative.

(vi) No Default. No Default or Event of Default shall have occurred and be continuing on the First Amendment Effective Date or after giving effect to the making of the Tranche B Term Loans on the First Amendment Effective Date.

(vii) Representations and Warranties. The representations and warranties set forth in Section 6 hereof shall, except to the extent that they relate to a particular date, be true and correct in all material respects on and as of the First Amendment Effective Date as if made on and as of such date.

(viii) Refinancing. All amounts outstanding (other than contingent obligations) under the Senior Notes, the Senior Add-on Notes and the Topco PIK Notes (each as defined in the Credit Agreement), in each case shall have been or, substantially concurrently with the initial funding of the Tranche B Term Loans by the Tranche B Term Lenders hereunder shall be, repaid, redeemed, defeased, terminated or otherwise discharged (or notice for the repayment, redemption, defeasance, termination or discharge thereof has been given).

(ix) IPO. The Pubco IPO (as defined in the Credit Agreement) shall have been or, substantially concurrently with the initial funding of the Tranche B Term Loans by the Tranche B Term Lenders hereunder shall be, consummated and the gross proceeds thereof shall be at least $600,000,000.

The making of, or exchange of an Original Initial Term Loan for, Tranche B Term Loans by the Tranche B Term Lenders hereunder shall conclusively be deemed to constitute an acknowledgment by the Administrative Agent, and each Tranche B Term Lender and each Incremental Term Lender that each of the conditions precedent set forth in this Section 5(a) shall have been satisfied in accordance with its respective terms or shall have been irrevocably waived by such Person.

(b) Effectiveness of Elective Amendments. The Elective Amendments shall become effective on the First Amendment Effective Date at the time (the “Elective Amendments Effective Time”) immediately following the occurrence of the Refinancing Amendments Effective Time.

 

14


(c) Effectiveness of Incremental Amendments. The Incremental Amendments shall become effective on the First Amendment Effective Date at the time (the “Incremental Amendments Effective Time”) immediately following the occurrence of the Elective Amendments Effective Time.

The execution and delivery of this First Amendment by the Administrative Agent, the Tranche B Term Lenders and the Incremental Term Lenders shall conclusively be deemed to constitute an acknowledgment by the Administrative Agent and each Tranche B Term Lender and each Incremental Term Lender that each of the conditions precedent set forth in this Section 5(b) and (c) of this First Amendment shall have been satisfied in accordance with its respective terms or shall have been irrevocably waived by such Person.

SECTION 6. Representations and Warranties. In order to induce the Tranche B Term Lenders and the Incremental Term Lenders to consent to this First Amendment and to make or exchange its Original Initial Term Loans for its respective Tranche B Term Loans and Supplemental Term Loans, the Borrower with respect to itself and its Restricted Subsidiaries represents and warrants to each of the Tranche B Term Lenders, the Incremental Term Lenders and the Agents that on and as of the date hereof after giving effect to this First Amendment:

(a) the execution, delivery and performance by each Loan Party party hereto of this First Amendment is within such Loan Party’s corporate or other organizational powers, have been duly authorized by all necessary corporate or other organizational action, and will not (i) violate any Requirement of Law or Contractual Obligation of such Loan Party in any respect that would reasonably be expected to have a Material Adverse Effect and (ii) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) on any of such Loan Party’s properties or revenues pursuant to any such Requirement of Law or Contractual Obligation;

(b) this First Amendment constitutes a legal, valid and binding obligation of each Loan Party party hereto, enforceable against such Loan Party in accordance with its terms, except as enforceability may be limited by applicable domestic or foreign bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law); and

(c) after giving effect to the amendments set forth in this First Amendment, each of the representations and warranties made by any Loan Party pursuant to the Credit Agreement or any other Loan Document (or in any amendment, modification or supplement thereto) to which it is a party, and each of the representations and warranties contained in any certificate furnished at any time by or on behalf of any Loan Party pursuant to the Credit Agreement or any other Loan Document are, except to the extent that they relate to a particular date, true and correct in all material respects on and as of the date hereof.

 

15


SECTION 7. Effects on Loan Documents; Acknowledgment.

(a) Except as expressly set forth herein, this First Amendment (i) shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent, the Collateral Agent or the Loan Parties under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect and nothing herein can or may be construed as a novation thereof. Each Loan Party reaffirms its obligations under the Loan Documents to which it is party and the validity, enforceability and perfection of the Liens granted by it pursuant to the Security Documents on the First Amendment Effective Date. This First Amendment shall constitute a Loan Document for purposes of the Credit Agreement and from and after the First Amendment Effective Date, all references to the Credit Agreement in any Loan Document and all references in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Credit Agreement, shall, unless expressly provided otherwise, refer to the Credit Agreement as amended by this First Amendment. Each of the Loan Parties hereby consents to this First Amendment and confirms that all obligations of such Loan Party under the Loan Documents to which such Loan Party is a party shall continue to apply to the Credit Agreement, as amended hereby.

(b) Without limiting the foregoing, each of the Loan Parties party to the Guarantee and Collateral Agreement and the other Security Documents, in each case as amended, supplemented, waived or otherwise modified from time to time, hereby (i) acknowledges and agrees that the Tranche B Term Loans and Supplemental Term Loans are Term Loans and the Tranche B Term Lenders and Incremental Term Lenders are Lenders, (ii) acknowledges and agrees that all of its obligations under the Guarantee and Collateral Agreement and the other Security Documents to which it is a party are reaffirmed and remain in full force and effect on a continuous basis, (iii) reaffirms each Lien granted by such Loan Party to the Collateral Agent for the benefit of the Secured Parties and reaffirms the guaranties made pursuant to the Guarantee and Collateral Agreement, (iv) acknowledges and agrees that the grants of security interests by and the guaranties of such Loan Party contained in the Guarantee and Collateral Agreement and the other Security Documents are, and shall remain, in full force and effect after giving effect to the First Amendment and (v) agrees that the Borrower Obligations and the Guarantor Obligations (each as defined in the Guarantee and Collateral Agreement) include, among other things and without limitation, the prompt and complete payment and performance by the Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of principal and interest on, the Tranche B Term Loans and Supplemental Loans.

 

16


SECTION 8. Lender Consents and Authorization.

(a) Each Tranche B Term Lender and Incremental Term Lender party hereto (i) represents and warrants that it is legally authorized to enter into this First Amendment; (ii) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Subsections 5.1 and 7.1 of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this First Amendment; (iii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (iv) appoints and authorizes each applicable Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to each such Agent, as applicable, by the terms thereof, together with such powers as are incidental thereto; (v) hereby affirms the acknowledgments and representations of such Tranche B Term Lender and Incremental Term Lender party hereto as a Lender contained in Subsection 10.5 of the Credit Agreement; provided, however, that the reference to the “Confidential Information Memorandum” in the second sentence thereof shall instead refer to that certain Lender Presentation [dated [●], 2021 and furnished to the lenders on [●], 2021]; and (vi) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with the terms of the Credit Agreement all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender, including its obligations pursuant to Subsection 11.16 of the Credit Agreement, and, if it is organized under the laws of a jurisdiction outside the United States, its obligations pursuant to Subsection 4.11(b) of the Credit Agreement.

(b) Each Tranche B Term Lender and Incremental Term Lender party hereto has delivered or shall deliver herewith to the Borrower and the Administrative Agent such forms, certificates or other evidence with respect to United States federal income tax withholding matters as such Tranche B Term Lender and Incremental Term Lender party hereto may be required to deliver to the Borrower and the Administrative Agent pursuant to Subsection 4.11 of the Credit Agreement.

(c) Upon execution, delivery and effectiveness hereof, the Administrative Agent will record the Tranche B Term Loans of each Tranche B Term Lender party hereto and the Supplemental Term Loans of each Incremental Term Lender party hereto in the Register.

SECTION 9. Expenses. The Borrower agrees to pay or reimburse the Administrative Agent in accordance with Subsection 11.5 of the Credit Agreement for (1) all of its reasonable and documented and invoiced out-of-pocket costs and expenses incurred in connection with this First Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, and (2) the reasonable and documented and invoiced fees and disbursements of Simpson Thacher & Bartlett LLP, as counsel to the Administrative Agent (and, for the avoidance of doubt, not of counsel to any other Lender).

 

17


SECTION 10. Counterparts. This First Amendment may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this First Amendment by facsimile transmission, email or other electronic transmission (e.g., a “pdf”, “tiff” or DocuSign) shall be effective as delivery of a manually executed counterpart hereof. For purposes hereof, the words “execution,” “execute,” “executed,” “signed,” “signature” and words of like import shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formulations on electronic platforms, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transaction Act.

SECTION 11. Governing Law. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

SECTION 12. Headings. The headings of this First Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

[Remainder of page intentionally left blank.]

 

18


IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered as of the date first above written.

 

CORE & MAIN LP

By:

   

Name:

 

Title:

 

 

[Core & Main - Signature Page to First Amendment to Term Loan Credit Agreement]


Acknowledgment and Consent

Each Guarantor acknowledges and consents to each of the foregoing provisions of this First Amendment. Each Guarantor further acknowledges and agrees that all Obligations under the Credit Agreement as modified by this First Amendment shall be fully guaranteed and secured pursuant to the Guarantee and Collateral Agreement in accordance with the terms and provisions thereof.

 

CORE & MAIN MIDCO, LLC

By:

   

Name:

 

Title:

 

CORE & MAIN INTERMEDIATE GP, LLC

By:

   

Name:

 

Title:

 

 

[Core & Main - Signature Page to First Amendment to Term Loan Credit Agreement]


JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, New Tranche B Term Lender and Incremental Term Lender

By:

   

Name:

 

Title:

 

 

[Core & Main - Signature Page to First Amendment to Term Loan Credit Agreement]


Exhibit A

Form of Lender Signature Page to First Amendment

The undersigned, a Lender holding Original Initial Term Loans (“you”), hereby consents to the First Amendment to which this Existing Lender Signature Page to First Amendment is attached and which will amend the Credit Agreement, dated as of August 1, 2017 (as amended by the Lender Joinder Agreement, dated as of July 8, 2019, and as further amended, supplemented, waived or otherwise modified from time to time, the “Existing Credit Agreement”), among the Borrower, the several banks and other financial institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent, and which is dated as of the date first above written and to be entered into among the Borrower, the several banks and financial institutions parties thereto as Lenders and the Administrative Agent (the “First Amendment”). Capitalized terms used and not otherwise defined herein shall have the respective meanings given to such terms in the First Amendment or the Existing Credit Agreement, as applicable.

If you are an Existing Term Lender, you, if and only if you indicate below, hereby irrevocably and unconditionally approve of, and consent to, the First Amendment, and to the attachment of this Existing Lender Signature Page to the First Amendment, and hereby agree that all parties to the First Amendment are express third party beneficiaries of this Existing Lender Signature Page to First Amendment and hereby further agree as follows:

[Check ONLY ONE of the two boxes below]

 

 

CASHLESS ROLLOVER OPTION

Each undersigned Existing Term Lender hereby irrevocably and unconditionally approves of, and consents to, the First Amendment and the exchange (on a cashless basis) of 100% of the outstanding principal amount of the Original Initial Term Loans held by such Lender for a Tranche B Term Loan in a like principal amount. By choosing this option, each undersigned Lender hereby acknowledges and agrees that the Administrative Agent may, in its sole discretion, elect not to exchange any amount of such Lender’s Original Initial Term Loans for Tranche B Term Loans or to exchange (on a cashless basis) less than 100% of the principal amount of such Lender’s Original Initial Term Loans for Tranche B Term Loans, in which case the difference between the current principal amount of such Lender’s Original Initial Term Loans and the allocated principal amount of Tranche B Term Loans will be prepaid on, and subject to the occurrence of, the First Amendment Effective Date.

 

    

Lender

  

Amount of Original Initial Term Loans

     
     
     
     
  

Total

  


 

CASH SETTLEMENT OPTION

The undersigned Existing Term Lender hereby irrevocably and unconditionally approves of, and consents to, the First Amendment and having 100% of the outstanding principal amount of the Original Initial Term Loans held by such Existing Term Lender repaid on the First Amendment Effective Date and to purchase by assignment Tranche B Term Loans in a like principal amount. By choosing this option, each undersigned Lender hereby acknowledges and agrees that the Administrative Agent may, in its sole discretion, elect not to allocate to such Lender or to allocate less than 100% of the principal amount of such Lender’s Original Initial Term Loans in Tranche B Term Loans.

 

    

Lender

  

Amount of Original Initial Term Loans

     
     
     
     
  

Total

  

 

[Signature Page Follows]


IN WITNESS WHEREOF, the undersigned has caused this Existing Lender Signature Page to the First Amendment to be duly executed and delivered by its proper and duly authorized officer(s).

 

[NAME OF INSTITUTION]

By:

   
 

Name:

 

Title:

 

If a second signature is necessary:

By:

   
 

Name:

 

Title:

 

Name of Fund Manager (if any):_________________


Exhibit B

Initial Amended Credit Agreement

(See attached)


$1,075,000,000

TERM LOAN CREDIT AGREEMENT

among

CD&R WATERWORKS MERGER SUB, LLC,

to be merged with and into

HD SUPPLY WATERWORKS, LTD.,

as Borrower,

THE LENDERS

FROM TIME TO TIME PARTY HERETO,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Collateral Agent,

 

 

JPMORGAN CHASE BANK, N.A.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

CITIGROUP GLOBAL MARKETS INC.,

BARCLAYS BANK PLC,

CREDIT SUISSE SECURITIES (USA) LLC,

DEUTSCHE BANK SECURITIES INC.,

ROYAL BANK OF CANADA,

GOLDMAN SACHS BANK USA,

NATIXIS, NEW YORK BRANCH AND

NOMURA SECURITIES INTERNATIONAL, INC.

as Joint Lead Arrangers and Joint Bookrunners

dated as of August 1, 2017

 

 

 


Table of Contents

 

         

Page

 
SECTION 1  
Definitions  

1.1

  

Defined Terms

     1  

1.2

  

Other Definitional and Interpretive Provisions

     8295  
SECTION 2  
Amount and Terms of Commitments  

2.1

  

Initial Term Loans

     8699  

2.2

  

Notes

     86100  

2.3

  

Procedure for Initial Term Loan Borrowing

     87102  

2.4

  

[Reserved]

     87102  

2.5

  

Repayment of Loans

     87102  

2.6

  

[Reserved]

     88103  

2.7

  

[Reserved]

     88103  

2.8

  

Incremental Facilities

     88103  

2.9

  

Permitted Debt Exchanges

     92107  

2.10

  

Extension of Term Loans

     94109  

2.11

  

Specified Refinancing Facilities

     97113  
SECTION 3  
[Reserved]  
SECTION 4  
General Provisions Applicable to Loans  

4.1

  

Interest Rates and Payment Dates

     99115  

4.2

  

Conversion and Continuation Options

     100116  

4.3

  

Minimum Amounts; Maximum Sets

     101116  

4.4

  

Optional and Mandatory Prepayments

     101117  

4.5

  

Administrative Agent’s Fee; Other Fees

     114130  

4.6

  

Computation of Interest and Fees

     114131  

4.7

  

Inability to Determine Interest Rate

     115132  

4.8

  

Pro Rata Treatment and Payments

     115132  

4.9

  

Illegality

     117134  

4.10

  

Requirements of Law

     117134  

4.11

  

Taxes

     119136  

4.12

  

Indemnity

     124141  

4.13

  

Certain Rules Relating to the Payment of Additional Amounts

     125142  

 

(i)


Table of Contents

(continued)

 

         

Page

 

4.14

  

Defaulting Lender

     127144  
SECTION 5  
Representations and Warranties  

5.1

  

Financial Condition

     128145  

5.2

  

No Change; Solvent

     128145  

5.3

  

Corporate Existence; Compliance with Law

     129146  

5.4

  

Corporate Power; Authorization; Enforceable Obligations

     129146  

5.5

  

No Legal Bar

     130147  

5.6

  

No Material Litigation

     130147  

5.7

  

No Default

     130147  

5.8

  

Ownership of Property; Liens

     130147  

5.9

  

Intellectual Property

     130147  

5.10

  

Taxes

     131148  

5.11

  

Federal Regulations

     131148  

5.12

  

ERISA

     131148  

5.13

  

Collateral

     132149  

5.14

  

Investment Company Act; Other Regulations

     132150  

5.15

  

Subsidiaries

     133150  

5.16

  

Purpose of Loans

     133150  

5.17

  

Environmental Matters

     133150  

5.18

  

No Material Misstatements

     134151  

5.19

  

Labor Matters

     134151  

5.20

  

Insurance

     134152  

5.21

  

Anti-Terrorism

     135152  
SECTION 6  
Conditions Precedent  

6.1

  

Conditions to Initial Extension of Credit

     135150  
SECTION 7  
Affirmative Covenants  

7.1

  

Financial Statements

     139156  

7.2

  

Certificates; Other Information

     142159  

7.3

  

Payment of Taxes

     143160  

7.4

  

Conduct of Business and Maintenance of Existence; Compliance with Contractual Obligations and Requirements of Law

     143160  

7.5

  

Maintenance of Property; Insurance

     143160  

7.6

  

Inspection of Property; Books and Records; Discussions

     144161  

 

(ii)


Table of Contents

(continued)

 

         

Page

 

7.7

  

Notices

     145162  

7.8

  

Environmental Laws

     146163  

7.9

  

After-Acquired Real Property and Fixtures; Subsidiaries

     146164  

7.10

  

Use of Proceeds

     149167  

7.11

  

Commercially Reasonable Efforts to Maintain Ratings

     149167  

7.12

  

Accounting Changes

     149167  

7.13

  

Post-Closing Security Perfection

     149167  
SECTION 8  
Negative Covenants  

8.1

  

Limitation on Indebtedness

     150168  

8.2

  

Limitation on Restricted Payments

     156175  

8.3

  

Limitation on Restrictive Agreements

     161181  

8.4

  

Limitation on Sales of Assets and Subsidiary Stock

     164184  

8.5

  

Limitations on Transactions with Affiliates

     167187  

8.6

  

Limitation on Liens

     169189  

8.7

  

Limitation on Fundamental Changes

     170190  

8.8

  

Change of Control; Limitation on Amendments

     171192  

8.9

  

Limitation on Lines of Business

     172192  
SECTION 9  
Events of Default  

9.1

  

Events of Default

     173193  

9.2

  

Remedies Upon an Event of Default

     176196  
SECTION 10  
The Agents and the Other Representatives  

10.1

  

Appointment

     176197  

10.2

  

The Administrative Agent and Affiliates

     177198  

10.3

  

Action by an Agent

     177198  

10.4

  

Exculpatory Provisions

     178198  

10.5

  

Acknowledgement and Representations by Lenders

     179199  

10.6

  

Indemnity; Reimbursement by Lenders

     179201  

10.7

  

Right to Request and Act on Instructions

     180202  

10.8

  

Collateral Matters

     181203  

10.9

  

Successor Agent

     183206  

10.10

  

[Reserved]

     183206  

10.11

  

Withholding Tax

     184207  

10.12

  

Other Representatives

     184207  

 

(iii)


Table of Contents

(continued)

 

         

Page

 

10.13

  

Administrative Agent May File Proofs of Claim

     184207  

10.14

  

Application of Proceeds

     185208  

10.15

  

Certain ERISA Matters

     208  
SECTION 11  
Miscellaneous  

11.1

  

Amendments and Waivers

     186210  

11.2

  

Notices

     190217  

11.3

  

No Waiver; Cumulative Remedies

     192219  

11.4

  

Survival of Representations and Warranties

     192219  

11.5

  

Payment of Expenses and Taxes

     192220  

11.6

  

Successors and Assigns; Participations and Assignments

     194221  

11.7

  

Adjustments; Set-off; Calculations; Computations

     207234  

11.8

  

Judgment

     207235  

11.9

  

Counterparts

     208236  

11.10

  

Severability

     208236  

11.11

  

Integration

     208236  

11.12

  

Governing Law

     208236  

11.13

  

Submission to Jurisdiction; Waivers

     209236  

11.14

  

Acknowledgements

     210237  

11.15

  

Waiver of Jury Trial

     210238  

11.16

  

Confidentiality

     210238  

11.17

  

Incremental Indebtedness; Additional Indebtedness

     211239  

11.18

  

USA PATRIOT Act Notice

     212239  

11.19

  

Electronic Execution of Assignments and Certain Other Documents

     212240  

11.20

  

Reinstatement

     212240  

11.21

  

Acknowledgement and Consent to Bail-In of EEAAffected Financial Institutions

     212240  

11.22

  

[Reserved]

     241  

11.23

  

Recognition of U.S. Special Resolution Regime

     241  

 

(iv)


SCHEDULES

 

A

    —       

Commitments and Addresses

1.1(a)

    —       

Existing Investments

1.1(b)

    —       

Existing Liens

5.4

    —       

Consents Required

5.6

    —       

Litigation

5.9

    —       

Intellectual Property Claims

5.15

    —       

Subsidiaries

5.17

    —       

Environmental Matters

5.20

    —       

Insurance

7.2

    —       

Website Address for Electronic Financial Reporting

7.13

    —       

Post-Closing Collateral Requirements

8.1

    —       

Existing Indebtedness

8.5

    —       

Affiliate Transactions

EXHIBITS

    

A

    —       

Form of Term Loan Note

B

    —       

Form of Guarantee and Collateral Agreement

C

    —       

[Reserved]

D

    —       

Form of U.S. Tax Compliance Certificate

E

    —       

Form of Assignment and Acceptance

F

    —       

Form of Secretary’s Certificate

G

    —       

Form of Officer’s Certificate

H

    —       

Form of Solvency Certificate

I-1

    —       

Form of Increase Supplement

I-2

    —       

Form of Lender Joinder Agreement

J-1

    —       

Form of ABL/Term Loan Intercreditor Agreement

J-2

    —       

Form of Junior Lien Intercreditor Agreement

K

    —       

Form of Affiliated Lender Assignment and Assumption

L

    —       

[Reserved]

M

    —       

[Reserved]

N

    —       

Form of Acceptance and Prepayment Notice

O

    —       

Form of Discount Range Prepayment Notice

P

    —       

Form of Discount Range Prepayment Offer

Q

    —       

Form of Solicited Discounted Prepayment Notice

R

    —       

Form of Solicited Discounted Prepayment Offer

S

    —       

Form of Specified Discount Prepayment Notice

T

    —       

Form of Specified Discount Prepayment Response

U

    —       

Form of Compliance Certificate

V

    —       

Form of Tax Sharing Agreement

 

(v)


TERM LOAN CREDIT AGREEMENT, dated as of August 1, 2017, among CD&R WATERWORKS MERGER SUB, LLC, a Delaware limited liability company (prior to the Waterworks Merger and as further defined in Subsection 1.1, “Passthrough Mergersub”, and as further defined in Subsection 1.1, the “Borrower”), the several banks and other financial institutions from time to time party hereto (as further defined in Subsection 1.1, the “Lenders”) and JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity and as further defined in Subsection 1.1, the “Administrative Agent”) for the Lenders hereunder and as collateral agent (in such capacity and as further defined in Subsection 1.1, the “Collateral Agent”) for the Secured Parties (as defined in Subsection 1.1).

W I T N E S S E T H:

WHEREAS, to consummate the transactions contemplated by the Plumb Acquisition Agreement, the Borrower will (A) enter into this Agreement to borrow Initial Term Loans in an aggregate principal amount of $1,075,000,000 (unless reduced in accordance with Subsection 6.1(b)), (B) enter into the Senior ABL Agreement to borrow an additional amount and to cause certain letters of credit to be issued and (C) issue the Senior Notes, under the Senior Notes Indenture, generating aggregate gross proceeds of up to $500,000,000 (unless reduced in accordance with Subsection 6.1(b)); and

WHEREAS, the cash proceeds of the Equity Contribution, the Initial Term Loans, any ABL Facility Loans made on the Closing Date and the issuance of the Senior Notes will be used on the Closing Date, inter alia, to consummate the Transactions, and to pay fees, premiums and expenses incurred in connection with the Transactions.

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

SECTION 1

Definitions

1.1 Defined Terms1.1 Defined Terms. AUTONF D3_TC. As used in this Agreement, the following terms shall have the following meanings:

ABL Agent”: Citibank, N.A., in its capacity as administrative agent and collateral agent under the ABL Facility Documents, or any successor administrative agent or collateral agent under the ABL Facility Documents.

ABL Collateral Obligations”: the “ABL Collateral Obligations” as defined in the ABL/Term Loan Intercreditor Agreement or the equivalent term in any Other Intercreditor Agreement.

ABL Facility Documents”: the “Loan Documents” as defined in the Senior ABL Agreement, as the same may be amended, supplemented, waived, or otherwise modified, extended from time to time or refunded, refinanced, restructured, replaced, renewed, refinanced or replacedrepaid, increased, decreased or extended from time to time.

 

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ABL Facility Loans”: the loans borrowed under the Senior ABL Facility.

ABL Priority Collateral”: as defined in the ABL/Term Loan Intercreditor Agreement whether or not the same remains in full force and effect.

ABL/Term Loan Intercreditor Agreement”: the Intercreditor Agreement, dated as of the date hereofClosing Date, between the Collateral Agent and the ABL Agent (in its capacity as collateral agent under the ABL Facility Documents), and acknowledged by certain of the Loan Parties in the form attached hereto as Exhibit J-1, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms hereof and thereof.

ABR Loans”: Loans to which the rate of interest applicable is based upon the Alternate Base Rate.

Accelerated”: as defined in Subsection 9.1(e).

Acceleration”: as defined in Subsection 9.1(e).

Acceptable Discount”: as defined in Subsection 4.4(l)(iv)(2).

Acceptable Prepayment Amount”: as defined in Subsection 4.4(l)(iv)(3).

Acceptance and Prepayment Notice”: a written notice from the Borrower setting forth the Acceptable Discount pursuant to Subsection 4.4(l)(iv)(2) substantially in the form of Exhibit N.

Acceptance Date”: as defined in Subsection 4.4(l)(iv)(2).

“Acknowledging Party”: as defined in Subsection 11.21.

Acquired Companies”: Waterworks Blocker and Waterworks Opco.

Acquired Indebtedness”: Indebtedness of a Person (i) existing at the time such Person becomes a Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case other than Indebtedness Incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or such acquisition of assets. Acquired Indebtedness shall be deemed to be Incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.

Acquisition Indebtedness”: Indebtedness of (A) the Borrower or any Restricted Subsidiary Incurred to finance or refinance, or otherwise Incurred in connection with, any acquisition of any assets (including Capital Stock), business or Person, or any merger or consolidation of any Person with or into the Borrower or any Restricted Subsidiary, or (B) any Person that is acquired by or merged or consolidated with or into the Borrower or any Restricted Subsidiary (including Indebtedness thereof Incurred in connection with any such acquisition, merger or consolidation).

 

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Additional Agent”: as defined in the ABL/Term Loan Intercreditor Agreement, the Junior Lien Intercreditor Agreement or any Other Intercreditor Agreement, as applicable.

Additional Assets”: (i) any property or assets that replace the property or assets that are the subject of an Asset Disposition; (ii) any property or assets (other than Indebtedness and Capital Stock) used or to be used by the Borrower or a Restricted Subsidiary or otherwise useful in a Related Business, and any capital expenditures in respect of any property or assets already so used; (iii) the Capital Stock of a Person that is engaged in a Related Business and becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Borrower or another Restricted Subsidiary; or (iv) Capital Stock of any Person that at such time is a Restricted Subsidiary acquired from a third party.

Additional Incremental Lender”: as defined in Subsection 2.8(b).

Additional Indebtedness”: as defined in the ABL/Term Loan Intercreditor Agreement, any Junior Lien Intercreditor Agreement or any Other Intercreditor Agreement, as applicable.

Additional Obligations”: senior or subordinated Indebtedness (which Indebtedness may be (x) secured by a Lien ranking pari passu to the Lien securing the Term Loan Facility Obligations, (y) secured by a Lien ranking junior to the Lien securing the Term Loan Facility Obligations or (z) unsecured), including customary bridge financings, in each case issued or incurred by the Borrower, a Guarantor or an Escrow Subsidiary, the terms of which Indebtedness (ieither (x) do not provide for a maturity date or weighted average life to maturity earlier than the Initial Term Loan Maturity Date or shorter than the remaining weighted average life to maturity of the Initial Term Loans, as the case may be (other than an earlier maturity date and/or shorter weighted average life to maturity (1) for customary bridge financings, which, subject to customary conditions (as determined by the Borrower in good faith, which determination shall be conclusive), would either be automatically converted into or required to be exchanged for permanent financing which does not provide for an earlier maturity date or a shorter weighted average life to maturity than the Initial Term Loan Maturity Date or the remaining weighted average life to maturity of the Initial Term Loans, as applicable or, (2) pursuant to an escrow or similar arrangement with respect to the proceeds of such Additional Obligation) or (3) of Additional Obligations in an aggregate principal amount at any time outstanding (together with the aggregate principal amount of any Refinancing Indebtedness and Indebtedness under any Incremental Term Loan Commitments, any applicable Extended Tranche and any Specified Refinancing Term Loan Facility, in each case outstanding under the Earlier Maturity Date Basket) not in excess of the Earlier Maturity Date Basket), or (y) in the case of any Indebtedness under any revolving credit facility, do not provide for a maturity date earlier than the Stated Maturity of the ABL Facility Loans, (ii) to the extent such Indebtedness is subordinated, provide for customary payment subordination to the Term Loan Facility Obligations under the Loan Documents as determined by the Borrower in good faith, which determination shall be conclusive, and (iii) do not provide for any mandatory repayment or redemption from the Net Available Cash Proceeds of Asset Dispositions (other than any Asset Disposition in respect of any assets, business or Person the acquisition of which was financed, all or in part, with such Additional Obligations and the disposition of which was contemplated by any definitive agreement in respect of such acquisition) or Recovery Events or from Excess Cash

 

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Flow, to the extent the Net Available Cash Proceeds of such Asset Disposition or Recovery Event or such Excess Cash Flow are required to be applied to repay the Initial Term Loans hereunder pursuant to Subsection 4.4(e), on more than a ratable basis with the Initial Term Loans (after giving effect to any amendment in accordance with Subsection 11.1(d)(vi)); provided that (a) other than with respect to proceeds of such Additional Obligations which are subject to an escrow or similar arrangement and any related deposit of cash, Cash Equivalents and/or Temporary Cash Investments to cover interest and premium in respect of such Additional Obligations, such Indebtedness shall not be secured by any Lien on any asset of any Loan Party that does not also secure the Term Loan Facility Obligations, or be guaranteed by any Person other than the GuarantorsLoan Parties (it being understood that the primary obligation of an Escrow Subsidiary shall not constitute a guarantee by a Person other than a GuarantorLoan Party), and (b) if secured by Collateral, such Indebtedness (and all related Obligations) shall be subject to the terms of the ABL/Term Loan Intercreditor Agreement (if such Indebtedness and related Obligations constitute First Lien Obligations), any Junior Lien Intercreditor Agreement (if such Indebtedness and related Obligations do not constitute First Lien Obligations) or an Other Intercreditor Agreement (if otherwise agreed by the Administrative Agent and the Borrower Representative).

Additional Obligations Documents”: any document or instrument (including any guarantee, security agreement or mortgage and which may include any or all of the Loan Documents) issued or executed and delivered by any Loan Party or Escrow Subsidiary with respect to any Additional Obligations, Rollover Indebtedness or Letter of Credit Facilities.

Additional Specified Refinancing Lender”: as defined in Subsection 2.11(b).

Adjusted Interest Rate”: as defined in Subsection 2.8(d)(v).

Adjusted LIBOR Rate”: with respect to any Borrowing of Eurodollar Loans for any Interest Period, an interest rate per annum determined by the Administrative Agent to be equal to the higher of (i) (x) the LIBOR Rate for such Borrowing of Eurodollar Loans in effect for such Interest Period divided by (y) 1 minus the Statutory Reserves (if any) for such Borrowing of Eurodollar Loans for such Interest Period and (ii(x) solely with respect to Original Initial Term Loans, 1.00%, and (y) solely with respect to the Tranche B Term Loans, 0.00%.

Adjustment Date”: each date on or after the last day of the Borrower’s first full Fiscal Quarter ended at least three months after the Closing Date (i.e., January 28, 2018) that is the second Business Day following receipt by the Lenders of both (a) the financial statements required to be delivered pursuant to Subsection 7.1(a) or Subsection 7.1(b), as applicable, for the most recently completed fiscal period and (b) the related Compliance Certificate required to be delivered pursuant to Subsection 7.2(a) with respect to such fiscal period.

Administrative Agent”: as defined in the Preamble hereto and shall include any successor to the Administrative Agent appointed pursuant to Subsection 10.9.

Affected Eurodollar Rate”: as defined in Subsection 4.7.

 

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“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.

Affected Loans”: as defined in Subsection 4.9.

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

Affiliate Transaction”: as defined in Subsection 8.5(a).

Affiliated Debt Fund”: any Affiliated Lender that is primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, notes, bonds and similar extensions of credit or securities in the ordinary course, so long as (i) any such Affiliated Lender is managed as to day-to-day matters (but excluding, for the avoidance of doubt, as to strategic direction and similar matters) independently from Sponsor and any Affiliate of Sponsor that is not primarily engaged in the investing activities described above, (ii) any such Affiliated Lender has in place customary information screens between it and Sponsor and any Affiliate of Sponsor that is not primarily engaged in the investing activities described above, and (iii) none of Passthrough Holdings, Blocker HoldingsTopco, Midco, the Borrower or any of its Subsidiaries directs or causes the direction of the investment policies of such entity.

Affiliated Lender”: any Lender that is a Permitted Affiliated Assignee.

Affiliated Lender Assignment and Assumption”: as defined in Subsection 11.6(h)(i)(1).

Agents”: the collective reference to the Administrative Agent and the Collateral Agent, and “Agent” shall mean any of them.

Agreement”: this Credit Agreement, as amended, supplemented, waived or otherwise modified from time to time.

Alternate Base Rate”: for any day, a fluctuating rate per annum equal to the greatest of (a) the Base Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 0.50%, and (c) the Adjusted LIBOR Rate for an Interest Period of one-month beginning on such day (or if such day is not a Business Day, on the immediately preceding Business Day) (determined as if the relevant ABR Loan were a Eurodollar Loan) plus 1.00%. If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the NYFRB Rate or the Adjusted LIBOR Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c) above, as the case may be, of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Base Rate, the NYFRB Rate or the Adjusted LIBOR Rate shall be effective on the effective date of such change in the Base Rate, the NYFRB Rate or the Adjusted LIBOR Rate, respectively.

 

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Amendment”: as defined in Subsection 8.3(c).

Applicable Discount”: as defined in Subsection 4.4(l)(iii)(2).

“Applicable ECF Amount”: as defined in Subsection 4.4(e)(iii)(A)(1).

Applicable Margin”: in respect of (a) Original Initial Term Loans during the period from the Closing Date until the first Adjustment Date (i) with respect to ABR Loans, 2.00% per annum, and (ii) with respect to Eurodollar Loans, 3.00% per annum, and (b) Tranche B Term Loans, (i) with respect to ABR Loans, 1.50% per annum, and (ii) with respect to Eurodollar Loans, 2.50% per annum. The Applicable Margins with respect to Original Initial Term Loans will be adjusted on each Adjustment Date to the applicable rate per annum set forth under the heading “Applicable Margin for ABR Loans” or “Applicable Margin for Eurodollar Loans” on the Pricing Grid which corresponds to the Consolidated Total Leverage Ratio determined from the financial statements and Compliance Certificate relating to the end of the Fiscal Quarter immediately preceding such Adjustment Date; provided that in the event that the financial statements required to be delivered pursuant to Subsection 7.1(a) or 7.1(b), as applicable, and the related Compliance Certificate required to be delivered pursuant to Subsection 7.2(a), are not delivered when due, then:

(1) if such financial statements and Compliance Certificate are delivered after the date such financial statements and Compliance Certificate were required to be delivered (without giving effect to any applicable cure period) and the Applicable Margin increases from that previously in effect as a result of the delivery of such financial statements, then the Applicable Margin in respect of Original Initial Term Loans during the period from the date upon which such financial statements were required to be delivered (without giving effect to any applicable cure period) until the date upon which they actually are delivered shall, except as otherwise provided in clause (3) below, be the Applicable Margin as so increased;

(2) if such financial statements and Compliance Certificate are delivered after the date such financial statements and Compliance Certificate were required to be delivered and the Applicable Margin decreases from that previously in effect as a result of the delivery of such financial statements, then such decrease in the Applicable Margin shall not become applicable until the date upon which the financial statements and Compliance Certificate actually are delivered; and

(3) if such financial statements and Compliance Certificate are not delivered prior to the expiration of the applicable cure period, then, effective upon such expiration, for the period from the date upon which such financial statements and Compliance Certificate were required to be delivered (after the expiration of the applicable cure period) until two Business Days following the date upon which they actually are delivered, the Applicable Margin with respect to Original Initial Term Loans shall be 2.00% per annum, in the case of ABR Loans, and 3.00% per annum, in the case of Eurodollar Loans (it being understood that the foregoing shall not limit the rights of the Administrative Agent and the Lenders set forth in Section 9).

 

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“Approved Commercial Bank”: a commercial bank with a consolidated combined capital and surplus of at least $5,000,000,000.

Approved Fund”: as defined in Subsection 11.6(b).

“Asset Disposition”: any sale, lease, transfer, Division or other disposition of shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares, or (in the case of a Foreign Subsidiary) to the extent required by any applicable Requirement of Law), property or other assets (each referred to for the purposes of this definition as a “disposition”) by the Borrower or any of its Restricted Subsidiaries (including any disposition by means of a merger, consolidation or similar transaction) other than (i) a disposition to the Borrower or a Restricted Subsidiary, (ii) a disposition in the ordinary course of business (including in connection with any factoring agreement or similar arrangements), (iii) a disposition of Cash Equivalents, Investment Grade Securities or Temporary Cash Investments, (iv) the sale or discount (with or without recourse, and on customary or commercially reasonable terms, as determined by the Borrower in good faith, which determination shall be conclusive) of accounts receivable or notes receivable arisingwhich have arisen in the ordinary course of business, or the conversion or exchange of accounts receivable for notes receivable, (v) any Restricted Payment Transaction, (vi) a disposition that is governed by Subsection 8.7, (vii) any Financing Disposition, (viii) any “fee in lieu” or other disposition of assets to any Governmental Authority that continue in use by the Borrower or any Restricted Subsidiary, so long as the Borrower or any Restricted Subsidiary may obtain title to such assets upon reasonable notice by paying a nominal fee, (ix) any exchange of property pursuant to or intended to qualify under Section 1031 (or any successor section) of the Code, or any exchange of equipment to be leased, rented or otherwise used in a Related Business, (x) any financing transaction with respect to property built or acquired by the Borrower or any Restricted Subsidiary after the Closing Date, including any sale/leaseback transaction or asset securitization, (xi) any disposition arising from foreclosure, condemnation, eminent domain or similar action with respect to any property or other assets, or exercise of termination rights under any lease, license, concession or other agreement, or necessary or advisable (as determined by the Borrower in good faith, which determination shall be conclusive) in order to consummate any acquisition of any Person, business or assets, or pursuant to buy/sell arrangements under any joint venture or similar agreement or arrangement, (xii) except for purposes of calculating Net Available Cash for any such disposition for purposes of Subsection 8.4(b), any disposition of non-core assets acquired in connection with any acquisition of (or any merger, consolidation, amalgamation or other business combination with or into) any Person, business or assets or any Investment, (xiii) any disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary, (xiv) a disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Borrower or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), entered into in connection with such acquisition, (xv) a disposition of not more than 5.0% of the outstanding Capital Stock of a Foreign Subsidiary that has been approved by the Board of Directors, (xvi) any disposition or

 

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series of related dispositions for aggregate consideration not to exceed the greater of $37,500,00082,500,000 and 5.00% of Consolidated Tangible Assets (as of the earlier of the date such disposition was made or the date on which a binding commitment for such disposition was entered into), (xvii) the abandonment or other disposition of patents, trademarksany patent, trademark or other intellectual property or application that areis , in the good faith determination of the Borrower, which determination shall be conclusive, no longer economically practicablereasonable to maintain or useful in the conduct of the business of the Borrower and its Subsidiaries taken as a whole, (xviii) any license, sublicense or other grant of rights in or to any trademark, copyright, patent or other intellectual property, (xix) any Exempt Sale and Leaseback Transaction, (xx) the creation or granting of any Lien permitted under this Agreement or, (xxi) any sale of property or assets, if the acquisition of such property or assets was financed with Excluded Contributions. or (xxii) any exchange of assets (including a combination of assets and Cash Equivalents, Investment Grade Securities and Temporary Cash Investments) for assets used or useful in a Related Business (other than if such assets are solely cash, Cash Equivalents, Investment Grade Securities and/or Temporary Cash Investments) (or Capital Stock of a Person that will be a Restricted Subsidiary following such transaction) of comparable or greater fair market value (as determined by the Parent Borrower in good faith, which determination shall be conclusive).

Assignee”: as defined in Subsection 11.6(b)(i).

Assignment and Acceptance”: an Assignment and Acceptance, substantially in the form of Exhibit E hereto.

Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEAAffected Financial Institution.

Bail-In Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of the Bank Recovery and Resolution Directive, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule. or (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

Bank Products Agreement”: any agreement pursuant to which a bank or other financial institution or other Person agrees to provide (a) treasury services, (b) credit card, debit card, merchant card, purchasing card, stored value card, non-card electronic payable or other similar services (including the processing of payments and other administrative services with respect thereto), (c) cash management or related services (including controlled disbursements, automated clearinghouse transactions, return items, netting, overdrafts, depository, lockbox, stop payment, electronic funds transfer, information reporting, wire transfer and interstate depository network services) and (d) other banking, financial or treasury products or services as may be requested by the Borrower or any Restricted Subsidiary (other than letters of credit and other than loans and advances except indebtedness arising from services described in clauses (a) through (c) of this definition), including, for the avoidance of doubt, bank guarantees.

 

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Bank Products Obligations”: of any Person means the obligations of such Person pursuant to any Bank Products Agreement.

Bank Recovery and Resolution Directive”: Directive 2014/59/EU of the European Parliament and of the Council of the European Union.

Bankruptcy Proceeding”: as defined in Subsection 11.6(h)(iv).

Base Rate”: for any day, a rate per annum that is equal to the corporate base rate of interest establishedthe rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent as its “prime rate” in effect at its principal office in New York City on such day; each) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Base Rate shall be effective onfrom and including the date such change is publicly announced or quoted as being effective. The corporate base rate is not necessarily the lowest rate charged by the Administrative Agent to its customers.

“Benefit Plan”: any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

Benefited Lender”: as defined in Subsection 11.7(a).

“BHC Act Affiliate”: the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

Blocker Aggregator”: CD&R WW Holdings, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto.

Blocker Holdings”: (a) prior to the Blocker Merger, Blocker Mergersub and (b) following the Blocker Merger, Waterworks Blocker as successor to the Blocker Merger. Following the Blocker Merger, Waterworks Blocker shall be converted to a Delaware limited liability company.

Blocker Merger”: the merger of Blocker Mergersub with and into Waterworks Blocker, with Waterworks Blocker being the survivor of such merger.

Blocker Mergersub”: CD&R WW Merger Sub, LLC, a Delaware limited liability company, and any successor in interest thereto.

 

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

Board of Directors”: for any Person, the board of directors or other governing body of such Person or, if such Person does not have such a board of directors or other governing body and is owned or managed by a single entity, the board of directors or other governing body of such entity, or, in either case, any committee thereof duly authorized to act on behalf of such board of directors or other governing body. Unless otherwise provided, “Board of Directors” means the Board of Directors of the Borrower.

Borrower”: (a) prior to the Waterworks Merger, Passthrough Mergersub and (b) following the Waterworks Merger, Waterworks Opco as successor to the Waterworks Merger, and any successor in interest thereto permitted hereunder.

Borrower Offer of Specified Discount Prepayment”: the offer by the Borrower to make a voluntary prepayment of Term Loans at a specified discount to par pursuant to Subsection 4.4(l)(ii).

Borrower Partnership Agreement”: that certain limited partnership agreement of the Borrower dated as of the date hereofFirst Amendment Effective Date, among the Borrower, Passthrough Holdings, Waterworks Blocker and Management HoldingsMidco and Intermediate GP, as the same may be amended, supplemented or replaced from time to time (so long as, in the case of Tax Distributions, such amendment, supplement or replacement agreement (which replacement agreement may be the partnership or similar agreement of another Parent Entity or IPO Vehicle) is not more disadvantageous to the Lenders in any material respect than such partnership agreement as in effect on the ClosingFirst Amendment Effective Date).

Borrower Solicitation of Discount Range Prepayment Offers”: the solicitation by the Borrower of offers for, and the corresponding acceptance, if any, by a Lender of, a voluntary prepayment of Term Loans at a specified range at a discount to par pursuant to Subsection 4.4(l)(iii).

Borrower Solicitation of Discounted Prepayment Offers”: the solicitation by the Borrower of offers for, and the subsequentcorresponding acceptance, if any, by a Lender of, a voluntary prepayment of Term Loans at a discount to par pursuant to Subsection 4.4(l)(iv).

Borrowing”: the borrowing of one Type of Loan of a single Tranche from all the Lenders having Commitments or other commitments of the respective Tranche on a given date (or resulting from a conversion or conversions on such date) having, in the case of Eurodollar Loans, the same Interest Period.

Borrowing Base”: the sum of (1) 90.0% of the book value of Inventory of the Borrower and its Restricted Subsidiaries, (2) 90.0% of the book value of Receivables of the Borrower and its Restricted Subsidiaries and (3) cash, Cash Equivalents and Temporary Cash Investments of the Borrower and its Restricted Subsidiaries (in each case, determined as of the end of the most recently ended fiscal month of the Borrower for which internal consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available, and, in the case of any determination relating to any Incurrence of Indebtedness, on a pro forma basis including (x) any property or assets of a type described above acquired since the end of such fiscal month and (y) any property or assets of a type described above being acquired in connection therewith).

 

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Borrowing Date”: any Business Day specified in a notice delivered pursuant to either Subsection 2.3 or Subsection 2.4, as applicable, as a date on which the Borrower requests the Lenders to make Loans hereunder.

Borrowing Request”: as defined in Subsection 2.4(a).

Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close, except that, when used in connection with a Eurodollar Loan denominated in Dollars, “Business Day” shall mean any Business Day on which dealings in Dollars between banks may be carried on in London, England and New York, New York.

Capital Expenditures”: for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under leases evidencing Financing Lease Obligations) by the Borrower and the Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as capital expenditures on a consolidated statement of cash flows of the Borrower.

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

Captive Insurance Subsidiary”: any Subsidiary of the Borrower that is subject to regulation as an insurance company or captive insurance company (or any Subsidiary thereofof any of the foregoing).

Cash Capped Incremental Facility”: as defined in the definition of “Maximum Incremental Facilities Amount”.

Cash Equivalents”: any of the following: (a) money, (b) securities issued or fully guaranteed or insured by the United States of America, Canada, the United Kingdom, Switzerland or a member state of the European Union or any agency or instrumentality of any thereof, (c) time deposits, certificates of deposit or bankers’ acceptances of (i) any bank or other institutional lender under this Agreement or the Senior ABL Facility or any affiliate thereof or (ii) any commercial bank having capital and surplus in excess of $250,000,000 (or the foreign currency equivalent thereof as of the date of such investment) and the commercial paper of the holding company of which is rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or, if at such time neither is issuing ratings, a comparable rating of another nationally recognized rating agency), (d) repurchase obligations with a term of not more than seven10 days for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c)(i) or (c)(ii) above, (e) money market instruments, commercial paper or other short-term obligations rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent

 

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thereof by Moody’s (or, if at such time neither is issuing ratings, a comparable rating of another nationally recognized rating agency), (f) investments in money market funds subject to the risk limiting conditions of Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of 1940, as amended, (g) investment funds investing at least 90.0% of their assets in cash equivalents of the types described in clauses (a) through (f) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution), (h) investments similar to any of the foregoing denominated in foreign currencies approved by the Board of Directors, and (i) solely with respect to any Captive Insurance Subsidiary, any investment that any such Person is permitted to make in accordance with applicable law.

CD&R”: Clayton, Dubilier & Rice, LLC and any successor in interest thereto, and any successor to its investment management business.

CD&R Consulting Agreement”: the Consulting Agreement, dated as of the date hereofClosing Date, as amended by that certain letter agreement, dated as of August 5, 2019, by and among the Borrower, Topco, Midco, Intermediate GP and CD&R, pursuant to which CD&R may provide management, consulting and advisory services, as the same may be amended, supplemented, waived or otherwise modified from time to time so long as such amendment, supplement, waiver or modification complies with this Agreement (including Subsection 8.5 (for the avoidance of doubt, other than by reason of Subsection 8.5(b)(vii))).

CD&R Fund X”: Clayton, Dubilier & Rice Fund X, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto.

“CD&R Holdings GP”: CD&R Waterworks Holdings GP, Ltd., a Cayman Islands exempted company, and any successor in interest thereto.

CD&R Indemnification Agreement”: the Indemnification Agreement, dated as of the date hereofClosing Date, as amended by that certain letter agreement, dated as of August 5, 2019, by and among the Borrower, Topco, Midco, Intermediate GP, Passthrough Holdings, Blocker Holdings, certain CD&R Investors and CD&R and the other parties thereto, as the same may be amended, supplemented, waived or otherwise modified from time to time.

CD&R Investors”: collectively, (i) CD&R Fund X, (ii) Clayton, Dubilier & Rice Fund X-A, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (iii) CD&R Advisor Fund X, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (iv) CD&R Associates X, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (v) CD&R Investment Associates X, Ltd., a Cayman Islands exempted company, and any successor in interest thereto, (viCD&R Waterworks Holdings, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (vii) Blocker Aggregator, (viii) New Blocker, (ix) CD&R Waterworks Holdings GP, Ltd., a Cayman Islands exempted company, and any successor in interest thereto, (x) New Blocker Holdings, (xi) CD&R Fund X Advisor Waterworks A, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xii) CD&R Fund X Advisor Waterworks B, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xiii) CD&R Fund X Waterworks B, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xiv) CD&R Fund X Waterworks B1, L.P., a

 

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Cayman Islands exempted limited partnership, and any successor in interest thereto, (xv) CD&R Fund X-A Waterworks A, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xvi) CD&R Fund X-A Waterworks B, L.P a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xviiCD&R WW Advisor, LLC, Delaware limited liability company, and any successor in interest thereto, (xviii) CD&R Associates X Waterworks, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xix) CD&R Friends & Family Feeder Fund X Waterworks A, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xx) CD&R Friends & Family Feeder Fund X Waterworks B, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xxi) CD&R Professionals Fund X Waterworks, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto, (xxii) CD&R WW Holdings 2, LLC, a Delaware limited liability company, and any successor in interest thereto, (xxiii) CD&R WW Advisor 2, LLC, a Delaware limited liability company, and any successor in interest thereto and (xxiv) any Affiliate of any CD&R Investor identified in clauses (i) through (xxiii) of this definition.

“CDD Rule”: the Customer Due Diligence Requirements for Financial Institutions issued by the U.S. Department of Treasury Financial Crimes Enforcement Network under the Bank Secrecy Act (such rule published May 11, 2016 and effective May 11, 2018, as amended from time to time).

Change in Law”: as defined in Subsection 4.11(a).

Change of Control”: (i) (x) the Permitted Holders shall in the aggregate be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date) of (A) so long as the Borrower is a Subsidiary of any Parent Entity, shares or units of Voting Stock having less than 35.0% of the total voting power of all outstanding shares of such Parent Entity (other than a Parent Entity that is a Subsidiary of another Parent Entity) and (B) if the Borrower is not a Subsidiary of any Parent Entity, shares or units of Voting Stock having less than 35.0% of the total voting power of all outstanding shares of the Borrower and (y) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date), other than one or more Permitted Holders, shall be the “beneficial owner” of (A) so long as the Borrower is a Subsidiary of any Parent Entity, shares or units of Voting Stock having more than 35.0% of the total voting power of all outstanding shares of such Parent Entity (other than a Parent Entity that is a Subsidiary of another Parent Entity) and (B) if the Borrower is not a Subsidiary of any Parent Entity, shares or units of Voting Stock having more than 35.0% of the total voting power of all outstanding shares of the Borrower; (ii) so long as the Capital Stock of the Borrower is not listed on a nationally recognized stock exchange in the U.S. (whether through a Qualified IPO or otherwise), Passthrough Holdings (and any Successor Holding Company pursuant to and as defined in Subsection 9.16(e) of the Guarantee and Collateral Agreement), Blocker HoldingsMidco (and any Successor Holding Company pursuant to and as defined in Subsection 9.16(e) of the Guarantee and Collateral Agreement) and Management HoldingsIntermediate GP (and any Successor Holding Company pursuant to and as defined in Subsection 9.16(e) of the Guarantee and Collateral Agreement) shall (collectively) cease to own, directly or indirectly, 100.0% of the Capital Stock of the Borrower (or any Successor Borrower); or (iii) a “Change of Control” as defined in the Senior ABL Facility (or any agreement governing Refinancing Indebtedness in respect of the Senior

 

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ABL Facility, and in each case relating to Indebtedness and any unused commitments thereunder in an aggregate principal amount equal to or greater than $50,000,000); or (iv) a “Change of Control” as defined in the Senior Notes Indenture (or any indenture or other agreement governing Refinancing Indebtedness in respect of the Senior Notes, and in each case relating to Indebtedness in an aggregate principal amount equal to or greater than $50,000,000the greater of $100,000,000 and 6.50% of Consolidated Tangible Assets). Notwithstanding anything to the contrary in the foregoing, the Transactions and the Tranche B Effective Date Transactions shall not constitute or give rise to a Change of Control.

Change of Control Offer”: as defined in Subsection 8.8(a).

Claim”: as defined in Subsection 11.6(h)(iv).

Closing Date”: the date on which all the conditions precedent set forth in Subsection 6.1 shall be satisfied or waived.

Closing Date Material Adverse Effect”: a “Material Adverse Effect” (as defined in the Plumb Acquisition Agreement).

Code”: the Internal Revenue Code of 1986, as amended from time to time.

Collateral”: all assets of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.

Collateral Agent”: as defined in the Preamble hereto and shall include any successor to the Collateral Agent appointed pursuant to Subsection 10.9.

Collateral Representative”: (i) if the ABL/Term Loan Intercreditor Agreement is then in effect, the ABL Collateral Representative (as defined therein, with respect to ABL Priority Collateral) and the Term Loan Collateral Representative (as defined therein, with respect to Term Loan Priority Collateral), (ii) if any Junior Lien Intercreditor Agreement is then in effect, the Senior Priority Representative (as defined therein) and (iii) if any Other Intercreditor Agreement is then in effect, the Person acting as representative for the Collateral Agent and the Secured Parties thereunder for the applicable purpose contemplated by this Agreement and the Guarantee and Collateral Agreement.

Collection Amounts”: as defined in Section 10.14.

Commitment”: as to any Lender, such Lender’s Initial Term Loan Commitments and Incremental Commitments, as the context requires.

Committed Lenders”: JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Barclays Bank PLC, Credit Suisse AG, Deutsche Bank AG New York Branch, Royal Bank of Canada, Goldman Sachs Bank USA, Natixis, New York Branch and Nomura Corporate Funding Americas, LLC.

 

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Commodities Agreement”: in respect of a Person, any commodity futures contract, forward contract, option or similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is a party or beneficiary.

Commonly Controlled Entity”: an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Sections 414(m) and (o) of the Code.

Compliance Certificate”: as defined in Subsection 7.2(a).

Conduit Lender”: any special purpose corporation organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument delivered to the Administrative Agent (a copy of which shall be provided by the Administrative Agent to the Borrower on request); provided that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations under this Agreement, including its obligation to fund a Loan if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and; provided, further, that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to any provision of this Agreement, including Subsection 4.10, 4.11, 4.12 or 11.5, than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender if such designating Lender had not designated such Conduit Lender hereunder, (b) be deemed to have any Commitment or (c) be designated if such designation would otherwise increase the costs of any Facility or Tranche to the Borrower.

Confidential Information Memorandum”: that certain Confidential Information Memorandum furnished to the Lenders on or about July 12, 2017.

Consolidated Coverage Ratio”: as of any date of determination, the ratio of (ithe aggregate amount ofFour Quarter Consolidated EBITDA as of such date to (ii) Consolidated Interest Expense for the period of the most recent four consecutive Fiscal Quarters of the Borrower ending prior to the date of such determination for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available to (ii) Consolidated Interest Expense for such four Fiscal Quarters (in each of the foregoing clauses (i) and (ii),(determined for any fiscal quarter (or portion thereof) ending prior to the Closing Date, on a pro forma basis to give effect to the Transactions as if they had occurred at the beginning of such four-quarter period); provided that

(1) if, since the beginning of such period, the Borrower or any Restricted Subsidiary has Incurred any Indebtedness or the Borrower has issued any Designated Preferred Stock that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness by the Borrower or any Restricted Subsidiary or an issuance

 

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of Designated Preferred Stock of the Borrower, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness or Designated Preferred Stock as if such Indebtedness or Designated Preferred Stock had been Incurred or issued, as applicable, on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation shall be computed based on (A) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (B) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation); provided that, in the case of both of clauses (A) and (B), the Senior ABL Facility as of the Closing Date shall be treated as if it were in place for any fiscal quarter (or portion thereof) ending prior to the Closing Date, and the daily balance of Indebtedness thereunder for any date prior to the Closing Date shall be deemed to be $0),

(2) if, since the beginning of such period, the Borrower or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise acquired, retired or dischargedDischarged any Indebtedness, or any Designated Preferred Stock of the Borrower, that is no longer outstanding on such date of determination (each, a “Discharge”) or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a Discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been repaidDischarged with an equivalent permanent reduction in commitments thereunder) or a Discharge of Designated Preferred Stock of the Borrower, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Discharge of Indebtedness or Designated Preferred Stock, including with the proceeds of such new Indebtedness or such new Designated Preferred Stock of the Borrower, as if such Discharge had occurred on the first day of such period,

(3) if, since the beginning of such period, the Borrower or any Restricted Subsidiary shall have disposed of any company, any business or any group of assets constituting an operating unit of a business, including any such disposition occurring in connection with a transaction causing a calculation to be made hereunder, or designated any Restricted Subsidiary as an Unrestricted Subsidiary (any such disposition or designation, a “Sale”), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the company, business or group of assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to (A) the Consolidated Interest Expense attributable to any Indebtedness of the Borrower or any Restricted Subsidiary repaid, repurchased, redeemed, defeased or otherwise acquired, retired or dischargedDischarged with respect to the Borrower and its continuing Restricted Subsidiaries in connection with such Sale for such period (including but not limited to through the assumption of such Indebtedness by another Person) plus (B) if the Capital Stock of any Restricted Subsidiary is disposed of in such

 

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Sale or any Restricted Subsidiary is designated as an Unrestricted Subsidiary, the Consolidated Interest Expense for such period attributable to the Indebtedness of such Restricted Subsidiary to the extent the Borrower and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such Sale,

(4) if, since the beginning of such period, the Borrower or any Restricted Subsidiary (by merger, consolidation or otherwise) shall have made an Investment in any Person that thereby becomes a Restricted Subsidiary, or otherwise acquired any company, any business or any group of assets constituting an operating unit of a business, including any such Investment or acquisition occurring in connection with a transaction causing a calculation to be made hereunder, or designated any Unrestricted Subsidiary as a Restricted Subsidiary (any such Investment, acquisition or designation, a “Purchase”), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any related Indebtedness) as if such Purchase occurred on the first day of such period, and

(5) if, since the beginning of such period, any Person became a Restricted Subsidiary or was merged or consolidated with or into the Borrower or any Restricted Subsidiary, and since the beginning of such period such Person shall have Discharged any Indebtedness or made any Sale or Purchase that would have required an adjustment pursuant to clause (2), (3) or (4) above if made by the Borrower or a Restricted Subsidiary since the beginning of such period, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Discharge, Sale or Purchase occurred on the first day of such period;

provided that (in the event that the Borrower shall classify Indebtedness Incurred on the date of determination as Incurred in part under Subsection 8.1(a) and in part under Subsection 8.1(b), as provided in Subsection 8.1(c)(iii)) any such pro forma calculation of Consolidated Interest Expense shall not give effect to any such Incurrence of Indebtedness on the date of determination pursuant to Subsection 8.1(b) (other than, if the Borrower at its option has elected to disregard Indebtedness being Incurred on the date of determination in part under Subsection 8.1(a) for purposes of calculating the Consolidated Total Leverage Ratio for Incurring Indebtedness on the date of determination in part under Subsection 8.1(b)(x) or (xvii), Subsection 8.1(b)(x) or (xvii)) or to any Discharge of Indebtedness from the proceeds of any such Incurrence pursuant to such Subsection 8.1(b) (other than Subsection 8.1(b)(x) or (xvii), if the Incurrence of Indebtedness under Subsection 8.1(b)(x) or (xvii), as applicable, is being given effect to in the calculation of the Consolidated Coverage Ratio).

For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred, Designated Preferred Stock issued, or Indebtedness or Designated Preferred Stock repaid, repurchased, redeemed, defeased or otherwise acquired, retired or dischargedDischarged in connection therewith, the pro forma calculations in respect thereof (including in respect of anticipated cost savings or synergies relating to any such Sale, Purchase or other transaction) shall be as determined in good faith by the Chief Financial Officer or a Responsible Officer of the Borrower, which determination shall be conclusive; provided that with respect to cost savings or

 

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synergies relating to any Sale, Purchase or other transaction, the related actions are expected by the Borrower to be taken no later than 2436 months after the date of determination. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness). If any Indebtedness bears, at the option of the Borrower or a Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as the Borrower or such Restricted Subsidiary may designate. If any Indebtedness that is being given pro forma effect was Incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period; provided that, in the case of the Senior ABL Facility as of the Closing Date, such facility shall be treated as if it were in place for any fiscal quarter (or portion thereof) ending prior to the Closing Date, and the daily balance of Indebtedness thereunder for any date prior to the Closing Date shall be deemed to be $0. Interest on a Financing Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of the Borrower (which determination shall be conclusive) to be the rate of interest implicit in such Financing Lease Obligation in accordance with GAAP.

Consolidated EBITDA”: for any period, the Consolidated Net Income for such period, plus (xw) the following to the extent deducted in calculating such Consolidated Net Income, without duplication: (i) the amount of Permitted Payments made with respect to Tax Distributions pursuant to Subsection 8.2(b)(vii)(C) and the provision for all taxes (whether or not paid, estimated or accrued) based on income, profits or capital (including penalties and interest, if any), (ii) Consolidated Interest Expense, all items excluded from the definition of Consolidated Interest Expense pursuant to clause (iii) thereof (other than Special Purpose Financing Expense), any Special Purpose Financing Fees, and to the extent not reflected in Consolidated Interest Expense, costs of surety bonds in connection with financing activities, (iii) depreciation, (iv) amortization (including but not limited to amortization of goodwill and intangibles and amortization and write-off of financing costs), (v) any non-cash charges or non-cash losses, (vi) any expenses or charges related to any equity offering, acquisition or other Investment or Indebtedness permitted by this Agreement (whether or not consummated or Incurred, and including any offering or sale of Capital Stock of a Parent Entity or IPO Vehicle to the extent the proceeds thereof were contributed, or if not consummated, were intended to be contributed to the equity capital of the Borrower or any of its Restricted Subsidiaries), (vii) the amount of any loss attributable to non-controlling interests, (viii) all deferred financing costs written off and premiums paid in connection with any early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments, (ix) any management, monitoring, consulting and advisory fees and related expenses (including any such fees and expenses paid to CD&Rthe Sponsor or any of its Affiliates), (x) interest and investment income, (xi) the amount of loss on any Financing Disposition, (xii) any costs or expenses pursuant to any management or employee stock option or other equity-related plan, program or arrangement, or other benefit plan, program or arrangement, or any equity subscription or equityholder agreement, and (xiii) the amount of any pre-opening losses attributable to any newly opened location within 12 months of the opening of such location, (xiv) net out-of-pocket costs and expenses related to the acquiring of

 

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inventory of a prior supplier of a company in connection with becoming a provider to such company, (xv) any expenses incurred in connection with any plant shutdown, (xvi) internal software development costs that are expensed during the period but could have been capitalized in accordance with GAAP, (xvii) any adjustments resulting from the application of Accounting Standards Codification Topic No. 460 and (xviii) the amount of any reduction in inventory cost attributable to rebates earned on quantities purchased under vendor programs which are recorded as reserves on the balance for such period, plus (yx) the amount of net cost savings, operating expense reductions and synergies (including revenue synergies, including those related to new business and customer wins, the modification or renegotiation of contracts and other arrangements and pricing adjustments and increases) projected by the Borrower in good faith to be realized as the result of actions taken or to be taken on or prior to the Closing Date or within 2436 months of the Closing Date in connection with the Transactions, or within 2436 months of the initiation or consummation of any operational change or other initiative, or within 2436 months of the consummation of any applicable acquisition or cessation of operations (in each case, calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions (which adjustments may be incremental to pro forma adjustments made pursuant to the proviso to the definition of “Consolidated Coverage Ratio”, “Consolidated Secured Leverage Ratio” or, “Consolidated Total Leverage Ratio”). or “Four Quarter Consolidated EBITDA”), plus (y) without duplication of any item in the preceding clause (w) or (x), additions of the type reflected in any quality of earnings analysis prepared by independent certified public accountants of nationally recognized standing or any other accounting firm reasonably acceptable to the Administrative Agent (it being understood that any “Big Four” accounting firms are acceptable) and delivered to the Administrative Agent in connection with any acquisition of assets (including Capital Stock), business or Person, or any merger or consolidation of any Person with or into the Borrower or any Restricted Subsidiary, or any other Investment, in each case that is permitted under this Agreement.

Consolidated Interest Expense”: for any period, (i) the total interest expense of the Borrower and its Restricted Subsidiaries to the extent deducted in calculating Consolidated Net Income, net of any interest income of the Borrower and its Restricted Subsidiaries, including any such interest expense consisting of (A) interest expense attributable to Financing Lease Obligations (excluding, for the avoidance of doubt, any lease, rental or other expense in connection with a lease that is not a Financing Lease Obligation), (B) amortization of debt discount, (C) interest in respect of Indebtedness of any other Person that has been Guaranteed by the Borrower or any Restricted Subsidiary, but only to the extent that such interest is actually paid by the Borrower or any Restricted Subsidiary, (D) non-cash interest expense, (E) the interest portion of any deferred payment obligation, and (F) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, plus (ii) Preferred Stock dividends paid in cash in respect of Disqualified Stock of the Borrower held by Persons other than the Borrower or a Restricted Subsidiary or in respect of Designated Preferred Stock of the Borrower pursuant to Subsection 8.2(b)(xi)(A), minus (iii) to the extent otherwise included in such interest expense referred to in clause (i) above, Special Purpose Financing Expense, accretion or accrual of discounted liabilities not constituting Indebtedness, expense resulting from discounting of Indebtedness in conjunction with recapitalization or purchase accounting, any “additional interest” in respect of registration rights arrangements for any securities, amortization or write-off of financing costs, and any expensing of bridge, commitment

 

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or other financing fees, in each case under clauses (i) through (iii) above as determined on a Consolidated basis in accordance with GAAP; provided that gross interest expense shall be determined after giving effect to any net payments made or received by the Borrower and its Restricted Subsidiaries with respect to Interest Rate Agreements.

Consolidated Net Income”: for any period, the net income (loss) of the Borrower and its Restricted Subsidiaries, determined on a Consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends minus, without duplication of any other deduction in calculating Consolidated Net Income in respect of such amounts, the amount of Permitted Payments made with respect to Tax Distributions pursuant to Subsection 8.2(b)(vii)(C); provided that, without duplication, there shall not be included in such Consolidated Net Income:

(i) any net income (loss) of any Person if such Person is not the Borrower or a Restricted Subsidiary, except that (A) the Borrower’s or any Restricted Subsidiary’s net income for such period shall be increased by the aggregate amount actually dividended or distributed or that (as determined by the Borrower in good faith, which determination shall be conclusive) could have been dividended or distributed by such Person during such period to the Borrower or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (ii) below), to the extent not already included therein, and (B) the Borrower’s or any Restricted Subsidiary’s equity in the net loss of such Person shall be included to the extent of the aggregate Investment of the Borrower or any of its Restricted Subsidiaries in such Person,

(ii) solely for purposes of determining the amount available for Restricted Payments under Subsection 8.2(a)(3)(A) and Excess Cash Flow, any net income (loss) of any Restricted Subsidiary that is not a Subsidiary Guarantor if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of similar distributions by such Restricted Subsidiary, directly or indirectly, to the Borrower by operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its stockholders (other than (x) restrictions that have been waived or otherwise released, (y) restrictions pursuant to this Agreement or the other Loan Documents, the Senior Notes Documents and the ABL Facility Documents, and (z) restrictions in effect on the Closing Date with respect to a Restricted Subsidiary and other restrictions with respect to such Restricted Subsidiary that taken as a whole are not materially less favorable to the Lenders than such restrictions in effect on the Closing Date as determined by the Borrower in good faith, which determination shall be conclusive), except that (A) the Borrower’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of any dividend or distribution that was or that (as determined by the Borrower in good faith, which determination shall be conclusive) could have been made by such Restricted Subsidiary during such period to the Borrower or another Restricted Subsidiary (subject, in the case of a dividend that could have been made to another Restricted Subsidiary, to the limitation contained in this clause (ii)) and (B) the net loss of such Restricted Subsidiary shall be included to the extent of the aggregate Investment of the Borrower or any of its other Restricted Subsidiaries in such Restricted Subsidiary,

 

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(iii) (x) any gain or loss realized upon the sale, abandonment or other disposition of any asset of the Borrower or any Restricted Subsidiary (including pursuant to any sale/leaseback transaction) that is not sold, abandoned or otherwise disposed of in the ordinary course of business (as determined by the Borrower in good faith, which determination shall be conclusive) and (y) any gain or loss realized upon the disposal, abandonment or discontinuation of operations of the Borrower or any Restricted Subsidiary,

(iv) any extraordinary, unusual or, nonrecurring, exceptional, special or infrequent gain, loss or charge and any other gain, loss or charge not in the ordinary course of business (as reasonably determined and calculated by the Borrower in good faith, which determination shall be conclusive) (including fees, expenses and charges (or any amortization thereof) associated with the Transactions, the Tranche B Effective Date Transactions or any acquisition, merger or consolidation, whether or not completed), any severance, relocation, consolidation, closing, integration, facilities opening, business optimization and/or similar initiatives or programs, transition or restructuring costs, charges or expenses (whether or not classified as restructuring costs, charges or expenses on the consolidated financial statements of the Borrower), any signing, stretch, retention or completion bonuses, and any costs associated with curtailments or modifications to pension and post-retirement employee benefit plans,

(v) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies,

(vi) all deferred financing costs written off and premiums paid in connection with any early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments,

(vii) any unrealized gains or losses in respect of Hedge Agreements,

(viii) any unrealized foreign currency translation or transaction gains or losses, including in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person,

(ix) any non-cash compensation charge arising from any grant of limited liability company interests, stock, stock options or other equity based awards,

(x) to the extent otherwise included in Consolidated Net Income, any unrealized foreign currency translation or transaction gains or losses, including in respect of Indebtedness or other obligations of the Borrower or any Restricted Subsidiary owing to the Borrower or any Restricted Subsidiary,

 

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(xi) any non-cash charge, expense or other impact attributable to application of the purchase or recapitalization method of accounting (including the total amount of depreciation and amortization, cost of sales or other non-cash expense resulting from the write-up of assets to the extent resulting from such purchase or recapitalization accounting adjustments), non-cash charges for deferred tax valuation allowances and non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP,

(xii) any impairment charge or asset write-off, including any charge or write-off related to intangible assets, long-lived assets or investments in debt and equity securities, and any amortization of intangibles,

(xiii) expenses related to the conversion of various employee benefit and equity programs in connection with the Transactions or the Tranche B Effective Date Transactions, and non-cash compensation related expenses,

(xiv) any fees and expenses (or amortization thereof), and any charges or costs, in connection with or related to any acquisition, Investment, Asset Disposition, issuance of Capital Stock, issuance, repayment or other equity offering, dividend, distribution or other Restricted Payment, Incurrence, Discharge or refinancing of Indebtedness, or amendment or modification of any agreement or instrument relating to any Indebtedness (in each case, whether or not completed, consummated or Incurred, and including (i) any such transaction consummated prior to the Closing Date),, (ii) any offering or sale of Capital Stock of a Parent Entity or an IPO Vehicle to the extent the proceeds thereof were contributed, or if not consummated, were intended to be contributed to the equity capital of the Borrower or any of its Restricted Subsidiaries and (iii) any rating agency fees, consulting fees and other related expenses and/or letter of credit or similar fees),

(xv) to the extent covered by insurance and actually reimbursed (or the Borrower has determined that there exists reasonable evidence that such amount will be reimbursed by the insurer and such amount is not denied by the applicable insurer in writing within 180 days and is reimbursed within 365 days of the date of such evidence (with a deduction in any future calculation of Consolidated Net Income for any amount so added back to the extent not so reimbursed within such 365 day period)), any expenses with respect to liability or casualty events or business interruption, and

(xvi) any expenses, charges and losses in the form of earn-out obligations and contingent consideration obligations (including to the extent accounted for as performance and retention bonuses, compensation or otherwise) and adjustments thereof and purchase price adjustments, in each case paid in connection with any acquisition, merger or consolidation or Investment,

(xvii) any expenses or reserves for liabilities to the extent that the Borrower or any Restricted Subsidiary is entitled to indemnification therefor under binding agreements and is actually reimbursed (or the Borrower has determined that there exists reasonable evidence that such amount will be reimbursed by the indemnifying party and such amount is not denied by the applicable indemnifying party in writing within 180 days and is reimbursed within 365 days of the date of such evidence (with a deduction in any future calculation of Consolidated Net Income for any amount so added back to the extent not so reimbursed within such 365 day period)),

 

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(xviii) any accruals and reserves established or adjusted within 12 months after the Closing Date that are established as a result of the Transactions, and

(xix) effects of adjustments to accruals and reserves established during a prior period attributable to any change in the methodology of calculating reserves for returns, rebates and other chargebacks (including government program rebates),

provided, further, that the exclusion of any item pursuant to the foregoing clauses (i) through (xvixix) shall also exclude the tax impact of any such item, if applicable.

In the case of any unusual or nonrecurring gain, loss or charge (other than any unusual or nonrecurring gain, loss or charge related to the Transactions) not included in Consolidated Net Income pursuant to clause (iv) above in any determination thereof, the Borrower will deliver a certificate of a Responsible Officer to the Administrative Agent promptly after the date on which Consolidated Net Income is so determined, setting forth the nature and amount of such unusual or nonrecurring gain, loss or charge. Notwithstanding the foregoing, for the purpose of Subsection 8.2(a)(3)(A) only, there shall be excluded from Consolidated Net Income, without duplication, any income consisting of dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Borrower or a Restricted Subsidiary, and any income consisting of return of capital, repayment or other proceeds from dispositions or repayments of Investments consisting of Restricted Payments, in each case to the extent such income would be included in Consolidated Net Income and such related dividends, repayments, transfers, return of capital or other proceeds are applied by the Borrower to increase the amount of Restricted Payments permitted under Subsection 8.2(a)(3)(C) or (D).

In addition, Consolidated Net Income for any period ending on or prior to the Closing Date shall be determined based upon the net income (loss) reflected in the combined financial statements of the Waterworks Business for such period, with pro forma effect being given to the Transactions; and each Person that is a Restricted Subsidiary upon giving effect to the Transactions shall be deemed to be a Restricted Subsidiary and the Transactions shall not constitute a sale or disposition under clause (iii) above, for purposes of such determination.

Consolidated Secured Indebtedness”: as of any date of determination, (i) an amount equal to the Consolidated Total Indebtedness (without regard to clause (iii) of the definition thereof) as of such date that, in each case is then secured by Liens on Collateral (other than (x) Indebtedness secured by a Lien ranking junior to or subordinated to the Liens securing the Term Loan Facility Obligations (but, for the avoidance of doubt, not excluding ABL Facility Loans or other Consolidated Total Indebtedness secured by Liens pari passu therewith), (y) property or assets held in a defeasance or similar trust or arrangement for the benefit of the Indebtedness secured thereby and (z) solely with respect to the determination of the amount available to be Incurred pursuant to the Ratio Incremental Facility and clause (s) of “Permitted Liens”, Indebtedness Incurred pursuant to the Cash Capped Incremental Facility), minus (ii) the sum of (A) the amount of such Indebtedness consisting of Indebtedness of a type referred to in, or Incurred pursuant to, Subsection 8.1(b)(ix) and, (B) Unrestricted Cash of the Borrower and its Restricted Subsidiaries. (excluding any proceeds of any Indebtedness of the Borrower and its Restricted Subsidiaries in respect of ABL Facility Loans or loans under any other revolving

 

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facility) and (C) the average daily balance of Unrestricted Cash of the Borrower and its Restricted Subsidiaries that is proceeds of any Indebtedness of the Borrower and its Restricted Subsidiaries in respect of ABL Facility Loans or loans under any other revolving facility for the most recent four consecutive Fiscal Quarters of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) ending prior to the date of determination for which consolidated financial statements of the Borrower are available.

Consolidated Secured Leverage Ratio”: as of any date of determination, the ratio of (i) Consolidated Secured Indebtedness as at such date (after giving effect to any Incurrence or Discharge of Indebtedness on such date) to (ii) the Four Quarter Consolidated EBITDA as of such date; provided that, (x) in the event that the Borrower shall classify Indebtedness Incurred on the date of determination as secured in part pursuant to clause (k)(1) of the “Permitted Liens” definition in respect of Indebtedness Incurred pursuant to the Ratio Incremental Facility and in part pursuant to such clause (k)(1) in respect of Indebtedness Incurred pursuant to Subsection 8.1(b)(i) (other than pursuant to the Ratio Incremental Facility) or one or more other clauses or subclauses of the definition of “Permitted Liens” (other than clause (s)), as provided in clause (w) of the final paragraph of such definition, any calculation of the Consolidated Secured Leverage Ratio on such date of determination, including in the definition of “Maximum Incremental Facilities Amount”, shall not include any such Indebtedness (and shall not give effect to any Discharge of Indebtedness from the proceeds thereof) not Incurred pursuant to the Ratio Incremental Facility and (y) in the event that the Borrower shall classify Indebtedness Incurred on the date of determination as secured in part pursuant to clause (s) of the “Permitted Liens” definition and in part pursuant to one or more other clause of the definition of “Permitted Liens” (other than clause (k)(1) in respect of Indebtedness Incurred pursuant to the Ratio Incremental Facility), as provided in clause (x) of the final paragraph of such definition, any calculation of the Consolidated Secured Leverage Ratio on such date of determination shall not include any such Indebtedness (and shall not give effect to any Discharge of Indebtedness from the proceeds thereof) to the extent secured pursuant to any such other clause of such definition.

Consolidated Tangible Assets”: as of any date of determination, the total assets, less the sum of the goodwill and other intangible assets, in each case that is or would be reflected on the consolidated balance sheet of the Borrower as at the end of the most recently ended Fiscal Quarter of the Borrower for which such a balance sheet of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) is available, determined on a Consolidated basis in accordance with GAAP (and, in the case of any determination relating to any Incurrence of Indebtedness or Liens or any Investment, on a pro forma basis including any property or assets being acquired in connection therewith).

Consolidated Total Indebtedness”: as of any date of determination, an amount equal to (i) the aggregate principal amount of outstanding Indebtedness of the Borrower and its Restricted Subsidiaries as of such date consisting of (without duplication) Indebtedness for borrowed money (including Purchase Money Obligations and unreimbursed outstanding drawn amounts under funded letters of credit); Financing Lease Obligations; debt obligations evidenced by bonds, debentures, notes or similar instruments (but excluding surety bonds, performance

 

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bonds or other similar instruments); Disqualified Stock; and (in the case of any Restricted Subsidiary that is not a Subsidiary Guarantor) Preferred Stock, determined on a Consolidated basis in accordance with GAAP (excluding (x) items eliminated in Consolidation, (y) Hedging Obligations and (z) any outstanding Indebtedness under any revolving credit facility), plus (ii) the average daily balance of Indebtedness of the Borrower and its Restricted Subsidiaries under any revolving credit facility for the most recent four consecutive Fiscal Quarters of the Borrower ending prior to the date of determination for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available (provided that for any date prior to the Closing Date the daily balance of Indebtedness of the Borrower and its Restricted Subsidiaries under revolving credit facilities shall be deemed to be $0), minus (iii) the sum of (A) the amount of such Indebtedness consisting of Indebtedness of a type referred to in, or Incurred pursuant to, Subsection 8.1(b)(ix), and (B) Unrestricted Cash of the Borrower and its Restricted Subsidiaries (excluding any proceeds of any Indebtedness of the Borrower and its Restricted Subsidiaries in respect of ABL Facility Loans or loans under any other revolving facility) and (C) the average daily balance of Unrestricted Cash of the Borrower and its Restricted Subsidiaries that is proceeds of any Indebtedness of the Borrower and its Restricted Subsidiaries in respect of ABL Facility Loans or loans under any other revolving facility for the most recent four consecutive Fiscal Quarters of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) ending prior to the date of determination for which consolidated financial statements of the Borrower are available. For purposes hereof, any earn-out or similar obligations shall not constitute Consolidated Total Indebtedness until such obligation would becomebecomes a liability on the consolidated balance sheet of the Borrower in accordance with GAAP and is not paid within 30 days after becoming due and payable.

Consolidated Total Leverage Ratio”: as of any date of determination, the ratio of (i) Consolidated Total Indebtedness as at such date (after giving effect to any Incurrence or Discharge of Indebtedness on such date) to (ii) the Four Quarter Consolidated EBITDA as of such date; provided that, for purposes of the foregoing calculation, in the event that the Borrower shall classify Indebtedness Incurred on the date of determination as Incurred in part pursuant to Subsection 8.1(b)(x) (other than by reason of subclausessubclause (2) or (4) of the proviso to such clause (x)) or Subsection 8.1(b)(xvii)) and in part pursuant to one or more other clauses or subclauses of Subsection 8.1(b) and/or (unless the Borrower at its option has elected to disregard Indebtedness being Incurred on the date of determination in part pursuant to subclausessubclause (2) or (4) of the proviso to Subsection 8.1(b)(x) or Subsection 8.1(b)(xvii) for purposes of calculating the Consolidated Coverage Ratio for Incurring Indebtedness on the date of determination in part under Subsection 8.1(a)) pursuant to Subsection 8.1(a) (as provided in Subsections 8.1(c)(ii) and (iii)), Consolidated Total Indebtedness shall not include any such Indebtedness Incurred pursuant to one or more such other clauses or subclauses of Subsection 8.1(b) and/or pursuant to Subsection 8.1(a), and shall not give effect to any Discharge of any Indebtedness from the proceeds of any such Indebtedness being disregarded for purposes of the calculation of the Consolidated Total Leverage Ratio on such date of determination that otherwise would be included in Consolidated Total Indebtedness.

 

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Consolidated Working Capital”: at any date, the excess of (a) the sum of all amounts (other than cash, Cash Equivalents and Temporary Cash Investments) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower at such date excluding the current portion of current and deferred income taxes over (b) the sum of all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower on such date, including deferred revenue but excluding, without duplication, (i) the current portion of any Funded Debt, (ii) all Indebtedness consisting of Loans to the extent otherwise included therein, (iii) the current portion of interest and (iv) the current portion of current and deferred income taxes.

Consolidation”: the consolidation of the accounts of each of the Restricted Subsidiaries with those of the Borrower in accordance with GAAP; provided that “Consolidation” will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of the Borrower or any Restricted Subsidiary in any Unrestricted Subsidiary will be accounted for as an investment. The term “Consolidated” has a correlative meaning. For purposes of this Agreement for periods ending on or prior to the Closing Date, references to the consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) shall be to the combined financial statements of the Waterworks Business for such period, with pro forma effect being given to the Transactions (with Subsidiaries that comprise the Waterworks Business that are Subsidiaries of the Borrower after giving effect to the Transactions being deemed Subsidiaries of the Borrower), as the context may require.

Contingent Obligation”: with respect to any Person, any obligation of such Person guaranteeing any obligation that does not constitute Indebtedness (a “primary obligation”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (1) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (2) to advance or supply funds (a) for the purchase or payment of any such primary obligation or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor or (3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Contract Consideration”: as defined in the definition of “Excess Cash Flow.”Subsection 4.4(e)(iii)(A)(2)(z).

Contractual Obligation”: as to any Person, any provision of any material security issued by such Person or of any material agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Contribution Amounts”: the aggregate amount of capital contributions applied by the Borrower to permit the Incurrence of Contribution Indebtedness pursuant to Subsection 8.1(b)(xi).

 

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Contribution Indebtedness”: Indebtedness of the Borrower or any Restricted Subsidiary in an aggregate principal amount not greater than twice the aggregate amount of cash contributions (other than Excluded Contributions, the Pubco IPO Transaction Proceeds, the proceeds from the issuance of Disqualified Stock or contributions by the Borrower or any Restricted Subsidiary) made to the capital of the Borrower or such Restricted Subsidiary after the Closing Date (whether through the issuance or sale of Capital Stock or otherwise); provided that such Contribution Indebtedness (a) is Incurred within 180 days after the receipt of the related cash contribution and (b) is so designated as Contribution Indebtedness pursuant to a certificate of a Responsible Officer of the Borrower promptly following the date of Incurrence thereof.

“Core & Main Buyer”: Core & Main Buyer, Inc., a Delaware corporation, and any successor in interest thereto.

“Core & Main Connector”: Core & Main Connector, LLC, a Delaware limited liability company, and any successor in interest thereto.

“Covered Entity”: any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Covered Instrument”: as defined in Subsection 11.1(k).

Covered Liabilities”: as defined in Subsection 11.21.

“COVID-19”: the novel coronavirus disease, COVID-19 virus (SARS-COV-2 and all related strains and sequences) or mutation (or antigenic shift or drift) thereof or a disease or public health emergency resulting therefrom.

Cured Default”: as defined in Subsection 1.2(c).

Currency Agreement”: in respect of a Person, any foreign exchange contract, currency swap agreement or other similar agreement or arrangements (including derivative agreements or arrangements), as to which such Person is a party or a beneficiary.

Debt Financing”: the debt financing transactions contemplated under (a) the Loan Documents, (b) the ABL Facility Documents and (c) the Senior Notes Documents, in each case including any Interest Rate Agreements related thereto.

Declined Amounts”: the sum of (x) the Term Loan Declined Amounts and (y) the amount of Excess Cash Flow and Net Available Cash Proceeds of any Asset Disposition offered (to the extent the Borrower or any Restricted Subsidiary is required by the terms thereof) to prepay, repay or purchase other Indebtedness that is secured by the Collateral on a pari passu basis with the Obligations and which the holders of such Indebtedness decline to accept pursuant to the terms equivalent to Subsection 4.4(h) (as determined by the Borrower in good faith, which determination shall be conclusive).

 

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Default”: any of the events specified in Subsection 9.1, whether or not any requirement for the giving of notice (other than, in the case of Subsection 9.1(e), a Default Notice), the lapse of time, or both, or any other condition specified in Subsection 9.1, has been satisfied.

“Default Direction”: as defined in Subsection 11.1(k).

Default Notice”: as defined in Subsection 9.1(e).

“Default Right”: has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. § 252.81, 47.2 or 382.1, as applicable.

Defaulting Lender”: subject to Subsection 4.14(g), any Lender or Agent whose circumstances, acts or failure to act, whether directly or indirectly, cause it to meet any part of the definition of Lender Default.

Deposit Account”: any deposit account (as such term is defined in Article 9 of the UCC).

“Designated Affiliate”: as defined in Subsection 11.1(k).

Designated Noncash Consideration”: the non-cash consideration received by the Borrower or one of its Restricted Subsidiaries in connection with an Asset Disposition that is so designated as Designated Noncash Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting forth the basis of such valuation.

Designated Preferred Stock”: Preferred Stock of the Borrower (other than Disqualified Stock) or any Parent Entity or IPO Vehicle that is issued after the Closing Date for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock, pursuant to a certificate of a Responsible Officer of the Borrower; provided that the cash proceeds of such issuance shall be excluded from the calculation set forth in Subsection 8.2(a)(3)(B).

Designation Date”: as defined in Subsection 2.10(f).

Discharge”: as defined in clause (2) of the definition of “Consolidated Coverage Ratio.”to repay, repurchase, redeem, defease or otherwise acquire, retire or discharge; and the term “Discharged” shall have a correlative meaning.

Discharge of ABL Collateral Obligations”: the “Discharge of ABL Collateral Obligations” as defined in the ABL/Term Loan Intercreditor Agreement or the equivalent term in any Other Intercreditor Agreement.

Discount Prepayment Accepting Lender”: as defined in Subsection 4.4(l)(ii)(2).

Discount Range”: as defined in Subsection 4.4(l)(iii)(1).

Discount Range Prepayment Amount”: as defined in Subsection 4.4(l)(iii)(1).

 

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Discount Range Prepayment Notice”: a written notice of the Borrower Solicitation of Discount Range Prepayment Offers made pursuant to Subsection 4.4(l) substantially in the form of Exhibit O.

Discount Range Prepayment Offer”: the irrevocable written offer by a Lender, substantially in the form of Exhibit P, submitted in response to an invitation to submit offers following the Administrative Agent’s receipt of a Discount Range Prepayment Notice.

Discount Range Prepayment Response Date”: as defined in Subsection 4.4(l)(iii)(1).

Discount Range Proration”: as defined in Subsection 4.4(l)(iii)(3).

Discounted Prepayment Determination Date”: as defined in Subsection 4.4(l)(iv)(3).

Discounted Prepayment Effective Date”: in the case of a Borrower Offer of Specified Discount Prepayment, Borrower Solicitation of Discount Range Prepayment Offers or Borrower Solicitation of Discounted Prepayment Offers, or otherwise, the date that is five Business Days following the receipt by each relevant Lender of notice from the Administrative Agent in accordance with Subsection 4.4(l)(ii), Subsection 4.4(l)(iii) or Subsection 4.4(l)(iv), as applicable unless a shorter period is agreed to between the Borrower and the Administrative Agent.

Discounted Term Loan Prepayment”: as defined in Subsection 4.4(l)(i).

Disinterested Directors”: with respect to any Affiliate Transaction, one or more members of the Board of Directors of the Borrower, or one or more members of the Board of Directors of a Parent Entity or IPO Vehicle, having no material direct or indirect financial interest in or with respect to such Affiliate Transaction. A member of any such Board of Directors shall not be deemed to have such a financial interest by reason of such member’s holding Capital Stock of the Borrower or any Parent Entity or IPO Vehicle or any options, warrants or other rights in respect of such Capital Stock or by reason of such member receiving any compensation from the Borrower or any Parent Entity or IPO Vehicle, as applicable, on whose Board of Directors such member serves in respect of such member’s role as director.

Disposition”: as defined in the definition of “Asset Disposition” in this Subsection 1.1.

Disqualified Party”: (i) any competitor of the Borrower and its Restricted Subsidiaries that is in the same or a similar line of business as the Borrower and its Restricted Subsidiaries or any affiliate of such competitor and, (ii) any PersonsPerson whose principal investment strategy is investing in distressed debt or the pursuance of loan-to-own strategies that is identified from time to time in writing by the Borrower or CD&R to the Administrative Agent, (iii) any Person designated in writing by the Borrower or CD&R to the Administrative Agent (a) on or prior to June 4, 2017.the First Amendment Effective Date or (b) following the First Amendment Effective Date with the consent of the Administrative Agent (which consent shall not be unreasonably withheld, conditioned or delayed); provided, that in no event shall any

 

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notice given pursuant to clauses (ii) and (iii)(b) above apply to retroactively disqualify any Person who previously acquired and continues to hold, any Loans, Commitments or participations prior to the receipt of such notice, and (iv) any Lender that has made an incorrect representation or warranty or deemed representation or warranty with respect to not being a Net Short Lender as provided in Subsection 11.1(k); provided, that any Lender that has inadvertently or unintentionally made such incorrect representation or warranty or deemed representation or warranty with respect to not being a Net Short Lender shall cease to be a Disqualified Party if it has notified the Borrower in good faith that it has made such incorrect representation or warranty or deemed representation or warranty inadvertently or unintentionally.

Disqualified Stock”: with respect to any Person, any Capital Stock (other than Management Stock) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control” or an Asset Disposition or other disposition) (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the holder thereof (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control” or an Asset Disposition or other disposition), in whole or in part, in each case on or prior to the Initial Term Loan Maturity Date; provided that Capital Stock issued to any employee benefit plan, or by any such plan to any employees of the Borrower or any Subsidiary, shall not constitute Disqualified Stock solely because it may be required to be repurchased or otherwise acquired or retired in order to satisfy applicable statutory or regulatory obligations.

“Division”: as defined in Subsection 1.2(k).

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

Domestic Borrowing Base”: the sum of (1) 90.0% of the book value of Inventory of the Borrower and its Domestic Subsidiaries that are Restricted Subsidiaries, (2) 90.0% of the book value of Receivables of the Borrower and its Domestic Subsidiaries that are Restricted Subsidiaries and (3) cash, Cash Equivalents and Temporary Cash Investments of the Borrower and its Domestic Subsidiaries that are Restricted Subsidiaries (in each case, determined as of the end of the most recently ended fiscal month of the Borrower for which internal consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available, and, in the case of any determination relating to any Incurrence of Indebtedness, on a pro forma basis including (x) any property or assets of a type described above acquired since the end of such fiscal month and (y) any property or assets of a type described above being acquired in connection therewith).

Domestic Subsidiary”: any Restricted Subsidiary of the Borrower other than a Foreign Subsidiary.

“Earlier Maturity Date Basket”: at any date of determination, an amount equal to the greater of (1) $200,000,000 and (2) 50.0% of Four Quarter Consolidated EBITDA.

 

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“ECF Acquisition”: as defined in clause (a)(iii) of the definition of “Excess Cash Flow”.

“ECF Disposition”: as defined in clause (a)(iii) of the definition of “Excess Cash Flow”.

ECF Payment Date”: as defined in Subsection 4.4(e)(iii).

ECF Prepayment Amount”: as defined in Subsection 4.4(e)(iii).

EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition and is subject to the supervision of an EEA Resolution Authority, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision of an EEA Resolution Authority with its parent.

EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein and Norway.

EEA Resolution Authority”: any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

Environmental Costs”: any and all costs or expenses (including attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, fines, penalties, damages, settlement payments, judgments and awards), of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way relating to, any actual or alleged violation of, noncompliance with or liability under any Environmental Laws. Environmental Costs include any and all of the foregoing, without regard to whether they arise out of or are related to any past, pending or threatened proceeding of any kind.

Environmental Laws”: any and all U.S. or foreign, federal, state, provincial, territorial, local or municipal laws, rules, orders, enforceable guidelines and orders-in-council, regulations, statutes, ordinances, codes, decrees, and such requirements of any Governmental Authority properly promulgated and having the force and effect of law or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health (as it relates to exposure to Materials of Environmental Concern) or the environment, as have been, or now or at any relevant time hereafter are, in effect.

Environmental Permits”: any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any Environmental Law.

 

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Equity Contribution”: the direct or indirect cash equity contribution to Passthrough Holdings and New Blocker (with any cash equity contribution to Passthrough Holdings and New Blocker used in full to finance the Transactions or otherwise contributed to the Borrower) by CD&R Fund X and any other investors arranged by CD&R (collectively, the “Investors”), in an aggregate amount, when combined with the value of the equity of management of the Waterworks Business retained, rolled over or otherwise invested in connection with the Transactions is equal to at least 25% of the pro forma capitalization of the Borrower and its Subsidiaries after giving effect to the Transactions; provided that, for purposes of such calculation increased levels of Indebtedness (x) from any ABL Facility Loans Incurred on the Closing Date, other than Borrowings to finance the Transactions and (y) as a result of OID and/or upfront fees in respect of the Facilities and/or the Senior Notes other than the upfront fees (including such upfront fees that are structured as OID) payable under the Fee Letter shall be excluded from such calculation.

ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

Escrow Borrower”: as defined in Subsection 2.8(a).

Escrow Subsidiary”: a Wholly Owned Domestic Subsidiary formed or, established or designated for the purpose of Incurring Indebtedness the proceeds of which will be subject to an escrow or other similar arrangement; provided that upon the termination of all such escrow or similar arrangementarrangements of such Subsidiary, such Subsidiary shall cease to constitute an “Escrow Subsidiary” hereunder and shall merge with and into the Borrower or one of its Restricted Subsidiaries that is a Loan Party in accordance with Subsection 8.7. Prior to its merger with and into the Borrowersuch Person, each Escrow Subsidiary shall not own, hold or otherwise have any interest in any material assets other than the proceeds of the applicable Indebtedness Incurred by such Escrow Subsidiary and any cash, Cash Equivalents or Temporary Cash Investments Investedinvested in such Escrow Subsidiary to cover interest and premium in respect of such Indebtedness.

“Ethically Screened Affiliate”: any Affiliate of a Person that (i) is managed as to day-to-day matters (but excluding, for the avoidance of doubt, as to strategic direction and similar matters) independently from such Person and any other Affiliate of such Person that is not an Ethically Screened Affiliate, (ii) has in place customary information screens between it and such Person and any other Affiliate of such Person that is not an Ethically Screened Affiliate and (iii) such Person or any other Affiliate of such Person that is not an Ethically Screened Affiliate does not direct or cause the direction of the investment policies of such entity, nor does such Person’s or any such other Affiliate’s investment decisions influence the investment decisions of such entity.

EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

Eurodollar Loans”: Loans the rate of interest applicable to which is based upon the Adjusted LIBOR Rate.

 

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Event of Default”: any of the events specified in Subsection 9.1, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.

Excess Cash Flow”: for any period, an amount equal to the excess of:

(a) the sum, without duplication, of

(i) Consolidated Net Income for such period,

(ii) an amount equal to the amount of all non-cash charges to the extent deducted in calculating such Consolidated Net Income and cash receipts to the extent excluded in calculating such Consolidated Net Income (except to the extent such cash receipts are attributable to revenue or other items that would be included in calculating Consolidated Net Income for any prior period),

(iii) decreases in Consolidated Working Capital for such period (other than any such decreases arising (x) from any acquisition or disposition of (a) any business unit, division, line of business or Person or (b) any assets other than in the ordinary course of business (each, an “ECF Acquisition” or “ECF Disposition”, respectively) by the Borrower and the Restricted Subsidiaries completed during such period, (y) from the application of purchase accounting or (z) as a result of the reclassification of any balance sheet item from short-term to long-term or vice versa),

(iv) an amount equal to the aggregate net non-cash loss on Asset Dispositions (or any disposition specifically excluded from the definition of “Asset Disposition”) by the Borrower and theor any Restricted SubsidiariesSubsidiary during such period (other than in the ordinary course of business) to the extent deducted in calculating such Consolidated Net Income,

(v) cash receipts in respect of Hedge Agreements during such period to the extent not otherwise included in calculating such Consolidated Net Income, and

(vi) any extraordinary, unusual or, nonrecurring cash gain,, exceptional, special or infrequent cash gain and any other cash gain not in the ordinary course of business (as reasonably determined and calculated by the Borrower in good faith, which determination shall be conclusive), in each case to the extent deducted in calculating such Consolidated Net Income,

over (b) the sum, without duplication, of

(i) an amount equal to the amount of all non-cash credits included in calculating such Consolidated Net Income and cash charges to the extent not deducted in calculating such Consolidated Net Income,

(ii) [reserved],

 

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(iii) the aggregate amount of all principal payments, purchases or other retirements of Indebtedness of the Borrower and the Restricted Subsidiaries (including (A) the principal component of payments in respect of Financing Lease Obligations, and (Bthe amount of any repayment of Term Loans pursuant to Subsection 2.2(b) and (C) the amount of a mandatory prepayment of Term Loans pursuant to Subsection 4.4(e)(i) and any mandatory prepayment, repayment or redemption of Pari Passu Indebtedness pursuant to requirements under the agreements governing such Pari Passu Indebtedness similar to the requirements set forth in Subsection 4.4(e)(i) (as determined by the Borrower in good faith, which determination shall be conclusive), to the extent required due to an Asset Disposition (or any disposition specifically excluded from the definition of “Asset Disposition”) that resulted in an increase to Consolidated Net Income and not in excess of the amount of such increase, but excluding (x) all other prepayments of Loans, (y) all prepayments of ABL Facility Loans and (z) all prepayments of revolving loans (other than Revolving Loans hereunder), to the extent there is not an equivalent permanent reduction in commitments thereunder) made during such period, except to the extent financed with the proceeds of long-term Indebtedness of the Borrower or the Restricted Subsidiaries,

(iv) an amount equal to the aggregate net non-cash gain on Asset Dispositions (or any disposition specifically excluded from the definition of “Asset Disposition”) by the Borrower and the Restricted Subsidiaries during such period (other than in the ordinary course of business) to the extent included in calculating such Consolidated Net Income,

(v) increases in Consolidated Working Capital for such period (other than any such increases arising (x) from any ECF Acquisition or ECF Disposition by the Borrower and the Restricted Subsidiaries completed during such period, (y) from the application of purchase accounting or (z) as a result of the reclassification of any balance sheet item from short-term to long-term or vice versa),

(vi) payments by the Borrower and the Restricted Subsidiaries during such period in respect of long-term liabilities of the Borrower and the Restricted Subsidiaries other than Indebtedness, to the extent not already deducted in calculating Consolidated Net Income,

(vii) [reserved],

(viii) the amount of Restricted Payments (other than Investments) made in cash during such period (on a consolidated basis) by the Borrower and the Restricted Subsidiaries pursuant to Subsection 8.2(b) (other than with respect to Related Taxes pursuant to Subsection 8.2(b)(vii)(C) and pursuant to Subsections 8.2(b)(vi), (vii)(B) and (xvi)), to the extent such Restricted Payments were financed with internally generated cash flow of the Borrower and the Restricted Subsidiaries,

 

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(ix) the aggregate amount of expenditures actually made by the Borrower and the Restricted Subsidiaries in cash during such period (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such period and are not deducted in calculating Consolidated Net Income,

(x) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the Borrower and the Restricted Subsidiaries during such period that are made in connection with any prepayment of Indebtedness to the extent that such payments are not deducted in calculating Consolidated Net Income,

(xi) [reserved],

(xii) the aggregate amount of Permitted Payments made pursuant to Subsection 8.2(b)(vii)(B), with respect to Related Taxes pursuant to Subsection 8.2(b)(vii)(C) and taxes (including penalties and interest) paid in cash or tax reserves set aside or payable (without duplication) in such period to the extent they exceed the amount of tax expense deducted in calculating such Consolidated Net Income for such period,

(xiii) cash expenditures in respect of Hedge Agreements during such period to the extent not deducted in calculating such Consolidated Net Income, and

(xiv) (v) any extraordinary, unusual or, nonrecurring, exceptional, special or infrequent cash loss or charge and any other cash loss or charge not in the ordinary course of business (as reasonably determined and calculated by the Borrower in good faith, which determination shall be conclusive) (including fees, expenses, charges (or any amortization thereof) associated with the Transactions, the Tranche B Effective Date Transactions or any acquisition, merger or consolidation, whether or not completed), (w) any fees and expenses (or amortization thereof), and any charges or costs, in connection with or related to any acquisition, Investment, Asset Disposition, issuance of Capital Stock, issuance, repayment or other equity offering, dividend, distribution or other Restricted Payment, Incurrence, Discharge or refinancing of Indebtedness, or amendment or modification of any agreement or instrument relating to any Indebtedness (in each case, whether or not completed, after the date hereof or any accounting changeconsummated or Incurred, and including (i) any such transaction consummated prior to the date hereofClosing Date, (ii) any offering or sale of Capital Stock of a Parent Entity or an IPO Vehicle to the extent the proceeds thereof were contributed, or if not consummated, were intended to be contributed to the equity capital of the Borrower or any of its Restricted Subsidiaries and (iii) any rating agency fees, consulting fees and other related expenses and/or letter of credit or similar fees), (x) any severance, relocation, consolidation, closing, integration, facilities opening, business optimization and/or similar initiatives or programs, transition or restructuring costs, charges or

 

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expenses (whether or not classified as restructuring costs, charges or expenses on the consolidated financial statements of the Borrower), (y) any signing, stretch, retention or completion bonuses and (z) any costs associated with curtailments or modifications to pension and post-retirement employee benefit plans, in each case, to the extent not already deducted in calculating Consolidated Net Income.

For the avoidance of doubt, any amounts received or paid in respect of purchase price adjustments in accordance with the Plumb Acquisition Agreement shall be disregarded in calculating Excess Cash Flow.

Exchange Act”: the Securities Exchange Act of 1934, as amended from time to time.

“Exchange Agreement”: the Exchange Agreement, dated as of the [First Amendment Effective Date], by and among Pubco, Topco and holders of Capital Stock in Topco from time to time party thereto, pursuant to which, among other things, such holders may exchange Capital Stock in Topco and Capital Stock in Pubco for Capital Stock in Pubco, as the same may be amended, supplemented, waived or otherwise modified from time to time.

“Exchanging Term Lender”: as defined in Subsection 2.1(c)(ii).

“Excluded Affiliate”: as defined in Subsection 11.1(k).

Excluded Assets”: as defined in the Guarantee and Collateral Agreement.

Excluded Contribution”: Net Cash Proceeds, or the Fair Market Value (as of the date of contribution, issuance or sale) of property or assets, received by the Borrower as capital contributions to the Borrower after the Closing Date or from the issuance or sale (other than to a Restricted Subsidiary) of Capital Stock (other than Disqualified Stock or Designated Preferred Stock) of the Borrower, in each case to the extent designated as an Excluded Contribution pursuant to a certificate of a Responsible Officer of the Borrower and not previously included in the calculation set forth in Subsection 8.2(a)(3)(B)(x) for purposes of determining whether a Restricted Payment may be made.

Excluded Information”: as defined in Subsection 4.4(l)(i).

Excluded Liability”: any liability that is excluded under the Bail-In Legislation from the scope of any Bail-In Action including, without limitation, any liability excluded pursuant to Article 44 of the Bank Recovery and Resolution Directive.

Excluded Subsidiary”: at any date of determination, any Subsidiary of the Borrower:

(a) that is an Immaterial Subsidiary;

 

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(b) that is prohibited by Requirement of Law or Contractual Obligations existing on the Closing Date (or, in the case of any newly acquired Subsidiary, in existence at the time of acquisition but not entered into in contemplation thereof) from Guaranteeing, or granting Liens to secure, the Term Loan Facility Obligations or if Guaranteeing, or granting Liens to secure, the Term Loan Facility Obligations would require governmental (including regulatory) consent, approval, license or authorization unless such consent, approval, license or authorization has been received;

(c) with respect to which the Borrower and the Administrative Agent reasonably agree that the burden or cost or other consequences of providing a guarantee of the Term Loan Facility Obligations shall be excessive in view of the benefits to be obtained by the Lenders therefrom;

(d) with respect to which the provision of such guarantee of the Term Loan Facility Obligations would result in material adverse tax consequences to Management Holdings, Waterworks Holdings, Pubco, New Blocker, New Blocker Holdings, Blocker Holdings, Passthrough Holdings, Management Holdings, the BorrowerTopco or one of its Subsidiaries (or, at the election of the Borrower in connection with an initial public offering or other restructuring of the Borrower, any Parent Entity or IPO Vehicle, the Borrower or any of its Subsidiaries) (as determined by the Borrower in good faith, which determination shall be conclusive, and the Borrower shall take commercially reasonable efforts to promptly notify the Administrative Agent of any such determination, but failure to so notify the Administrative Agent shall not invalidate such determination);

(e) that is a Subsidiary of a Foreign Subsidiary;

(f) that is a joint venture or Non-Wholly Owned Subsidiary;

(g) that is an Unrestricted Subsidiary;

(h) that is a Captivean Insurance Subsidiary;

(i) that is a Special Purpose Entity;

(j) that is a Subsidiary formed solely for the purpose of (x) becoming a Parent Entity, or (y) merging with the Borrower in connection with another Subsidiary becoming a Parent Entity, in each case to the extent such entity becomes a Parent Entity or is merged with the Borrower within 60 days of the formation thereof, or otherwise creating or forming a Parent Entity;

(k) that is a Subsidiary acquired by the Borrower or any Subsidiary and, at the time of the relevant acquisition, is an obligor in respect of Acquired Indebtedness to the extent (and solely for so long as) the documents or instruments governing the applicable Acquired Indebtedness prohibits such Subsidiary from granting a Guarantee of the Term Loan Facility Obligations; or

(l) that is an Escrow Subsidiary; or

(m) that is a not-for-profit Subsidiary;

 

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provided that, notwithstanding the foregoing, (x) no Subsidiary that becomes a Guarantor at the election of the Borrower pursuant to Subsection 7.9(b) shall be an Excluded Subsidiary until it is released from its Term Loan Facility Obligations pursuant to Subsection 7.9(b) and (y) any Domestic Subsidiary that Guarantees the payment of, or is a borrower or obligor in respect of, the Senior ABL Facility or the Senior Notes shall not be an Excluded Subsidiary.

Subject to the proviso in the preceding sentence, any Subsidiary that fails to meet the foregoing requirements as of the last day of the period of the most recent four consecutive Fiscal Quarters for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available shall continue to be deemed an Excluded Subsidiary hereunder until the date that is 60 days following the date on which such annual or quarterly financial statements were required to be delivered pursuant to Subsection 7.1 with respect to such period.

Excluded Taxes”: (a) any Taxes measured by or imposed upon the net income of any Agent or Lender or its applicable lending office, or any branch or affiliate thereof, and all franchise Taxes, branch Taxes, Taxes on doing business or Taxes measured by or imposed upon the overall capital or net worth of any such Agent or Lender or its applicable lending office, or any branch or affiliate thereof, in each case imposed: (i) by the jurisdiction under the laws of which such Agent or Lender, applicable lending office, branch or affiliate is organized or is located, or in which its principal executive office is located, or any nation within which such jurisdiction is located or any political subdivision thereof; or (ii) by reason of any connection between the jurisdiction imposing such Tax and such Agent or Lender, applicable lending office, branch or affiliate other than a connection arising solely from such Agent or Lender having executed, delivered or performed its obligations under, or received payment under or enforced, this Agreement or any Notes, and (b) any Tax imposed by FATCA.

Exempt Sale and Leaseback Transaction”: any Sale and Leaseback Transaction (a) in which the sale or transfer of property occurs within 180 days of the acquisition of such property by the Borrower or any of its Subsidiaries or (b) that involves property with a book value equal to the greater of $25,000,000 and 3.50% of Consolidated Tangible Assets (as of the date on which a legally binding commitment for such Sale and Leaseback Transaction was entered into) equal to the greater of $58,000,000 and 3.50% of Consolidated Tangible Assets or less and is not part of a series of related Sale and Leaseback Transactions involving property with an aggregate value in excess of such amount and entered into with a single Person or group of Persons. For purposes of the foregoing, “Sale and Leaseback Transaction” means any arrangement with any Person providing for the leasing by the Borrower or any of its Subsidiaries of real or personal property that has been or is to be sold or transferred by the Borrower or any such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Borrower or such Subsidiary.

Existing Interest Rate”: as defined in Subsection 2.8(d)(v).

Existing Loans”: as defined in Subsection 2.10(a).

 

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“Existing Term Lenders”: those Lenders holding an Original Initial Term Loan immediately prior to the First Amendment Effective Date.

Existing Term Loans”: as defined in Subsection 2.10(a).

Existing Term Tranche”: as defined in Subsection 2.10(a).

Existing Tranche”: as defined in Subsection 2.10(a).

Extended Loans”: as defined in Subsection 2.10(a).

Extended Term Loans”: as defined in Subsection 2.10(a).

Extended Term Tranche”: as defined in Subsection 2.10(a).

Extended Tranche”: as defined in Subsection 2.10(a).

Extending Lender”: as defined in Subsection 2.10(b).

Extension”: as defined in Subsection 2.10(b).

Extension Amendment”: as defined in Subsection 2.10(c).

Extension Date”: as defined in Subsection 2.10(d).

Extension Election”: as defined in Subsection 2.10(b).

Extension of Credit”: as to any Lender, the making of an Original Initial Term Loan (excluding any Supplemental Term Loans being made under the Original Initial Term Loan Tranche), a Tranche B Term Loan (excluding any Supplemental Term Loans being made under the Tranche B Term Loan Tranche) or an Incremental Revolving Loan (other than the initial extension of credit thereunder).

Extension Request”: as defined in Subsection 2.10(a).

Extension Request Deadline”: as defined in Subsection 2.10(b).

Extension Series”: all Extended Loans that are established pursuant to the same Extension Amendment (or any subsequent Extension Amendment to the extent such Extension Amendment expressly provides that the Extended Loans provided for therein are intended to be part of any previously established Extension Series) and that provide for the same interest margins and amortization schedule.

Facility”: each of (a) the Original Initial Term Loan Commitments and the Extensions of Credit made thereunder (the “Initial Term Loan Facility”), (bthe Tranche B Term Loan Commitments and the Extensions of Credit made thereunder, (c) Incremental Term Loans of the same Tranche, (cd ) Incremental Revolving Commitments of the same Tranche and Extensions of Credit made thereunder, (de ) any Extended Term Loans of the same Extension Series and (ef) any Specified Refinancing Term Loans of the same Tranche (other than Tranche B Term Loans), and collectively the “Facilities.”

 

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Fair Market Value”: with respect to any asset or property, the fair market value of such asset or property as determined in good faith by senior management of the Borrower or the Board of Directors, whose determination shall be conclusive.

FATCA”: Sections 1471 through 1474 of the Code as in effect on the Closing Date (and any amended or successor provisions that are substantively comparable), and any regulations or other administrative authority promulgated thereunder, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with any of the foregoing and any fiscal or regulatory legislation, rules or practices adopted pursuant to any such intergovernmental agreement.

Federal District Court”: as defined in Subsection 11.13(a).

Federal Funds Effective Rate”: for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositarydepository institutions (as determined in such manner as the NYFRB shall set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate; provided that, if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

Fee Letter”: the Fee Letter, dated as of June 4, 2017, as amended by the letter agreement, dated as of June 23, 2017, and the letter agreement, dated as of July 14, 2017, among Passthrough Holdings, Passthrough Mergersub, JPMorgan Chase Bank, N.A., Bank of America, N.A., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Barclays Bank PLC, Credit Suisse AG, Credit Suisse Securities (USA) LLC, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., Royal Bank of Canada, Goldman Sachs Bank USA, Natixis, New York Branch and Nomura Corporate Funding Americas, LLC.

Financing Disposition”: any sale, transfer, conveyance or other disposition of, or creation or incurrence of any Lien on, property or assets (a) by the Borrower or any Subsidiary thereof to or in favor of any Special Purpose Entity, or by any Special Purpose Subsidiary, in each case in connection with the Incurrence by a Special Purpose Entity of Indebtedness, or obligations to make payments to the obligor on Indebtedness, which may be secured by a Lien in respect of such property or assets or (b) by the Borrower or any Subsidiary thereof to or in favor of any Special Purpose Entity that is not a Special Purpose Subsidiary.

Financing Lease Obligation”: an obligation that is”: any lease of property, real or personal, the obligations of the lessee in respect of which are required to be classified and accounted for as a capitalized or financing lease (and not, for the avoidance of doubt, notas an operating lease) on the balance sheet of such lessee for financial reporting purposes in accordance with GAAP prior to the adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842) by the Financial Accounting Standards Board (and all calculations and deliverables under this Agreement (other than those made under Subsection 7.1) shall be made or delivered, as applicable, based on GAAP as in effect prior to such adoption). The Stated Maturity of any Financing Lease Obligation shall be the date of the last payment of rent or any other amount due under the related lease.

 

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FIRREA”: the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time.

“Financing Lease Obligation”: an obligation under any Financing Lease.

“First Amendment”: the First Amendment, dated as of [], 2021, by and among the Borrower, the Lenders party thereto and the Administrative Agent.

“First Amendment Effective Date”: [], 2021.

First Lender Joinder Agreement Effective Date”: July 8, 2019.

First Lien Obligations”: (i) the Term Loan Facility Obligations and (ii) the Additional Obligations, Permitted Debt Exchange Notes, Rollover Indebtedness and Refinancing Indebtedness in respect of the Indebtedness described in this clause (ii) (other than any such Additional Obligations, Permitted Debt Exchange Notes, Rollover Indebtedness and Refinancing Indebtedness that are unsecured or secured by a Lien ranking junior to the LienLiens securing the Term Loan Facility Obligations) secured by a first priority security interest in the Term Loan Priority Collateral and a second priority security interest in the ABL Priority Collateral, collectively.

first priority”: with respect to any Lien purported to be created in any Collateral pursuant to any Security Document, that such Lien is the most senior Lien to which such Collateral is subject (subject to Liens permitted hereunder (including Permitted Liens) applicable to such Collateral which have priority over the respective Liens on such Collateral created pursuant to the relevant Security Document (or, in the case of Collateral constituting Pledged Stock (as defined in the Guarantee and Collateral Agreement), Permitted Liens of the type described in clauses (a), (k)(4) (other than subclause (z)), (l), (m), (n), (p)(1), (s) and, solely with respect to Permitted Liens described in the foregoing clauses, (o) of the definition thereof)). For purposes of this definition, a Lien purported to be created in any Collateral pursuant to any Security Document will be construed as the “most senior Lien” to which such Collateral is subject, notwithstanding the existence of a Permitted Lien on the Collateral that is pari passu with the Lien on such Collateral, so long as such Permitted Lien is subject to the terms of the ABL/Term Loan Intercreditor Agreement or an Other Intercreditor Agreement.

Fiscal Quarter”: for any fiscal year, each 13-week or 14-week fiscal period commencing on the day immediately following the last day of the previous Fiscal Quarter and ending on the Sunday closest to January 31, April 30, July 31 and October 31 (as applicable) of such fiscal year, or as otherwise designated by the Borrower in accordance with Subsection 7.12.

Fixed GAAP Date”: the ClosingFirst Amendment Effective Date; provided that at any time after the Closing Date, the Borrower may by written notice to the Administrative Agent elect to change the Fixed GAAP Date to be the date specified in such notice, and upon such notice, the Fixed GAAP Date shall be such date for all periods beginning on and after the date specified in such notice.

 

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Fixed GAAP Terms”: (a) the definitions of the terms “Borrowing Base”, “Capital Expenditures”, “Consolidated Coverage Ratio”, “Consolidated EBITDA”, “Consolidated Interest Expense”, “Consolidated Net Income”, “Consolidated Secured Indebtedness”, “Consolidated Secured Leverage Ratio”, “Consolidated Tangible Assets”, “Consolidated Total Indebtedness”, “Consolidated Total Leverage Ratio”, “Consolidated Working Capital”, “Consolidation”, “Domestic Borrowing Base”, “Excess Cash Flow”, “Financing Lease Obligation”, “Foreign Borrowing Base”, “Four Quarter Consolidated EBITDA”, “Inventory” and “Receivable”, (b) all defined terms in this Agreement to the extent used in or relating to any of the foregoing definitions, and all ratios and computations based on any of the foregoing definitions, and (c) any other term or provision of this Agreement or the Loan Documents that, at the Borrower’s election, may be specified by the Borrower by written notice to the Administrative Agent from time to time.

Foreign Borrowing Base”: the sum of (1) 90% of the book value of Inventory of the Borrower’s Foreign Subsidiaries that are Restricted Subsidiaries, (2) 90% of the book value of Receivables of the Borrower’s Foreign Subsidiaries that are Restricted Subsidiaries and (3) cash, Cash Equivalents and Temporary Cash Investments of the Borrower’s Foreign Subsidiaries that are Restricted Subsidiaries (in each case, determined as of the end of the most recently ended fiscal month of the Borrower for which internal consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available, and, in the case of any determination relating to any Incurrence of Indebtedness, on a pro forma basis including (x) any property or assets of a type described above acquired since the end of such fiscal month and (y) any property or assets of a type described above being acquired in connection therewith).

Foreign Pension Plan”: a registered pension plan which is subject to applicable pension legislation other than ERISA or the Code, which a Restricted Subsidiary sponsors or maintains, or to which it makes or is obligated to make contributions.

Foreign Plan”: each Foreign Pension Plan, deferred compensation or other retirement or superannuation plan, fund, program, agreement, commitment or arrangement whether oral or written, funded or unfunded, sponsored, established, maintained or contributed to, or required to be contributed to, or with respect to which any liability is borne, outside the United States of America, by the Borrower or any of its Restricted Subsidiaries, other than any such plan, fund, program, agreement or arrangement sponsored by a Governmental Authority.

Foreign Subsidiary”: any Subsidiary of the Borrower (a) that is organized under the laws of any jurisdiction outside of the United States of America and any Subsidiary of such Foreign Subsidiary or (b) that is a Foreign Subsidiary Holdco. Any subsidiary of the Borrower which is organized and existing under the laws of Puerto Rico or any other territory of the United States of America shall be a Foreign Subsidiary.

 

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Foreign Subsidiary Holdco”: any Restricted Subsidiary of the Borrower, so long as such Restricted Subsidiary has no material assets other than shares, equity interests, Capital Stock or other securities or indebtedness of one or more Foreign Subsidiaries (or Subsidiaries thereof), intellectual property relating to such Foreign Subsidiaries (or Subsidiaries thereof), and/or other assets (including cash, Cash Equivalents and Temporary Cash Investments) relating to an ownership interest in any such securities, indebtedness, intellectual property or Subsidiaries. Any Subsidiary which is a Foreign Subsidiary Holdco that fails to meet the foregoing requirements as of the last day of the period for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available shall continue to be deemed a “Foreign Subsidiary Holdco” hereunder until the date that is 60 days following the date on which such annual or quarterly financial statements were required to be delivered pursuant to Subsection 7.1 with respect to such period.

Four Quarter Consolidated EBITDA”: as of any date of determination, the aggregate amount of Consolidated EBITDA for the period of the most recent four consecutive Fiscal Quarters of the Borrower ending prior to the date of such determination for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available (determined for any fiscal quarter (or portion thereof) ending prior to the Closing Date, on a pro forma basis to give effect to the Transactions as if they had occurred at the beginning of such four quarter period), provided that:

(1) if, since the beginning of such period, the Borrower or any Restricted Subsidiary shall have made a Sale (including any Sale occurring in connection with a transaction causing a calculation to be made hereunder), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the company, business, group of assets or Subsidiary that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period;

(2) if, since the beginning of such period, the Borrower or any Restricted Subsidiary (by merger, consolidation or otherwise) shall have made a Purchase (including any Purchase occurring in connection with a transaction causing a calculation to be made hereunder), Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Purchase occurred on the first day of such period; and

(3) if, since the beginning of such period, any Person became a Restricted Subsidiary or was merged or consolidated with or into the Borrower or any Restricted Subsidiary, and since the beginning of such period such Person shall have made any Sale or Purchase that would have required an adjustment pursuant to clause (1) or (2) above if made by the Borrower or a Restricted Subsidiary since the beginning of such period, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Sale or Purchase occurred on the first day of such period.

 

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For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto, the pro forma calculations in respect thereof (including, without limitation, in respect of anticipated cost savings or synergies relating to any such Sale, Purchase or other transaction) shall be as determined in good faith by the Chief Financial Officer or another authorizedResponsible Officer of the Borrower, which determination shall be conclusive; provided that with respect to cost savings or synergies relating to any Sale, Purchase or other transaction, the related actions are expected by the Borrower to be taken no later than 2436 months after the date of determination.

Funded Debt”: all Indebtedness of the Borrower and the Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of the Borrower or any Restricted Subsidiary, to a date that is more than one year from such date, or that arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all amounts of such debt required to be paid or prepaid within one year from the date of its creation and, in the case of the Borrower, Indebtedness in respect of the Term Loans.

GAAP”: generally accepted accounting principles in the United States of America as in effect on the Fixed GAAP Date (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Agreement), including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession, and subject to the following sentence. If at any time the SEC permits or requires U.S. domiciled companies subject to the reporting requirements of the Exchange Act to use IFRS in lieu of GAAP for financial reporting purposes, the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) may elect by written notice to the Administrative Agent to so use IFRS in lieu of GAAP and, upon any such notice, references herein to GAAP shall thereafter be construed to mean (a) for periods beginning on and after the date specified in such notice, IFRS as in effect on the date specified in such notice (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Agreement) and (b) for prior periods, GAAP as defined in the first sentence of this definition. All ratios and computations based on GAAP contained in this Agreement shall be computed in conformity with GAAP.

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

Guarantee”: any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

 

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Guarantee and Collateral Agreement”: the Term Loan Guarantee and Collateral Agreement delivered to the Collateral Agent as of the date hereofClosing Date, substantially in the form of Exhibit B hereto, as the same may be amended, supplemented, waived or otherwise modified from time to time.

Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any such obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith, which determination shall be conclusive.

Guarantor Subordinated Obligations”: with respect to a Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on the Closing Date or thereafter Incurred) that is expressly subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Subsidiary Guaranty pursuant to a written agreement.

Guarantors”: the collective reference to each Holding Company (or any Successor Holding Company in respect thereof pursuant to and as defined in Subsection 9.16(e) of the Guarantee and Collateral Agreement) (unless and until such Holding Company is released from all of its obligations pursuant to Subsection 9.16(h) of the Guarantee and Collateral Agreement) and each Subsidiary Guarantor; individually, a “Guarantor.”

Hedge Agreements”: collectively, Interest Rate Agreements, Currency Agreements and Commodities Agreements.

Hedging Obligations”: as to any Person, the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodities Agreement.

 

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Holding Companies”: Passthrough Holdings, Blocker Holdings and Management Holdings, collectivelyMidco and Intermediate GP, collectively (and, in each case, any Successor Holding Company in respect thereof pursuant to and as defined in Subsection 9.16(e) of the Guarantee and Collateral Agreement), and each individually, a “Holding Company.”

Identified Participating Lenders”: as defined in Subsection 4.4(l)(iii)(3).

Identified Qualifying Lenders”: as defined in Subsection 4.4(l)(iv)(3).

IFRS”: International Financial Reporting Standards and applicable accounting requirements set by the International Accounting Standards Board or any successor thereto (or the Financial Accounting Standards Board, the Accounting Principles Board of the American Institute of Certified Public Accountants, or any successor to either such board, or the SEC, as the case may be), as in effect from time to time.

Immaterial Subsidiary”: any Subsidiary of the Borrower designated as such in writing by the Borrower to the Administrative Agent that (i) (x) contributed 5.0% or less of Consolidated EBITDA for the period of the most recent four consecutive Fiscal Quarters ending prior to the date of such determination for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available, and (y) had consolidated assets representing 5.0% or less of Consolidated Tangible Assets as of the end of the most recently ended financial period for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available; and (ii) together with all other Immaterial Subsidiaries designated pursuant to the preceding clause (i), (x) contributed 5.07.5% or less of Consolidated EBITDA for the period of the most recent four consecutive Fiscal Quarters ending prior to the date of such determination for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available, and (y) had consolidated assets representing 5.07.5% or less of Consolidated Tangible Assets as of the end of the most recently ended financial period for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available. Any Subsidiary so designated as an Immaterial Subsidiary that fails to meet the foregoing requirements as of the last day of the period of the most recent four consecutive Fiscal Quarters for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available shall continue to be deemed an “Immaterial Subsidiary” hereunder until the date that is 60 days following the date on which such annual or quarterly financial statements were required to be delivered pursuant to Subsection 7.1(a) or 7.1(b) with respect to such period.

Increase Supplement”: as defined in Subsection 2.8(c).

Increased Amount”: as defined in Subsection 2.8(d)(v).

 

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Incremental Commitment Amendment”: as defined in Subsection 2.8(d).

Incremental Commitments”: as defined in Subsection 2.8(a).

Incremental Indebtedness”: Indebtedness Incurred by the Borrower pursuant to and in accordance with Subsection 2.8.

Incremental Lenders”: as defined in Subsection 2.8(b).

Incremental Letter of Credit Commitments”: as defined in Subsection 2.8(a).

Incremental Loans”: as defined in Subsection 2.8(d).

Incremental Revolving Commitments”: as defined in Subsection 2.8(a).

Incremental Revolving Loans”: any loans drawn under an Incremental Revolving Commitment.

Incremental Term Loan”: any Incremental Loan made pursuant to an Incremental Term Loan Commitment.

Incremental Term Loan Commitments”: as defined in Subsection 2.8(a).

Incur”: issue, assume, enter into any Guarantee of, incur or otherwise become liable for; and the terms “Incurs”, “Incurred” and “Incurrence” shall have a correlative meaning; provided that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness, and the payment of dividends on Capital Stock constituting Indebtedness in the form of additional shares of the same class of Capital Stock, will be deemed not to be an Incurrence of Indebtedness. Any Indebtedness issued at a discount (including Indebtedness on which interest is payable through the issuance of additional Indebtedness) shall be deemed Incurred at the time of original issuance of the Indebtedness at the initial accreted amount thereof.

Indebtedness”: with respect to any Person on any date of determination (without duplication):

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

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

(iii) all reimbursement obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit, bankers’ acceptances or other instruments plus the aggregate amount of drawings thereunder that have not then been reimbursed) (except to the extent such reimbursement obligations relate to Trade Payables and such obligations are expected to be satisfied within 30 days of becoming due and payable);

 

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

(v) all Financing Lease Obligations of such Person;

(vi) the redemption, repayment or other repurchase amount of such Person with respect to any Disqualified Stock of such Person or (if such Person is a Subsidiary of the Borrower other than a Subsidiary Guarantor) any Preferred Stock of such Subsidiary, but excluding, in each case, any accrued dividends (the amount of such obligation to be equal at any time to the maximum fixed involuntary redemption, repayment or repurchase price for such Capital Stock, or if less (or if such Capital Stock has no such fixed price), to the involuntary redemption, repayment or repurchase price therefor calculated in accordance with the terms thereof as if then redeemed, repaid or repurchased, and if such price is based upon or measured by the fair market value of such Capital Stock, such fair market value shall be as determined in good faith by senior management of the Borrower, the Board of Directors of the Borrower or the Board of Directors of the issuer of such Capital Stock, in each case which determination shall be conclusive);

(vii) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of Indebtedness of such Person shall be the lesser of (A) the fair market value of such asset at such date of determination (as determined in good faith by the Borrower, which determination shall be conclusive) and (B) the amount of such Indebtedness of such other Persons;

(viii) all Guarantees by such Person of Indebtedness of other Persons, to the extent so Guaranteed by such Person; and

(ix) to the extent not otherwise included in this definition, net Hedging Obligations of such Person (the amount of any such obligation to be equal at any time to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable by such Person at such time);

provided that Indebtedness shall not include (t) any obligations attributable to the exercise of dissenters’ or appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, (u) any liability for federal, state, local or other taxes owed or owing to any government or other taxing authority, (v) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller, (w) obligations, to the extent such obligations constitute Indebtedness, under any agreement that has been defeased or satisfied and discharged pursuant to

 

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the terms of such agreement, (x) Contingent Obligations Incurredincurred in the ordinary course of business or consistent with past practice, (y) in connection with the purchase by the Borrower or any Restricted Subsidiary of any business, any post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, (so long as (i) at the time of closing, the amount of any such payment is not determinable and, (ii) to the extent such payment thereafter becomes fixed and determined, the amount is paid in a timely manner) or (z) for the avoidance of doubt, any obligations or liabilities which would be required to be classified and accounted for as an operating lease for financial reporting purposes in accordance with GAAP as of the date hereofprior to the adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842) by the Financial Accounting Standards Board.

The amount of Indebtedness of any Person at any date shall be determined as set forth above or as otherwise provided for in this Agreement, or otherwise shall equal the amount thereof that would appear as a liability on a balance sheet of such Person (excluding any notes thereto) prepared in accordance with GAAP.

Indemnified Liabilities”: as defined in Subsection 11.5(d).

Indemnitee”: as defined in Subsection 11.5(d).

Initial Agreement”: as defined in Subsection 8.3(c).

Initial Default”: as defined in Subsection 1.2(c).

Initial Lien”: as defined in Subsection 8.6.

Initial Term Loan”: as defined in Subsection 2.1(a)collectively, the Original Initial Term Loans and the Tranche B Term Loans.

Initial Term Loan Commitment”: as to any Lender, its obligation to make Initial Term Loans to the Borrower pursuant to Subsection 2.1(a) in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A under the heading “the Original Initial Term Loan Commitment”; collectively, as to all the Lenders, the “ Initial Term Loan Commitments.” The original aggregate amount of the Initial Term Loan Commitments on the Closing Date is $1,075,000,000. (if any) and the Tranche B Term Loan Commitment (if any).

Initial Term Loan Facility”: as defined in the definition of “Facility.”

Initial Term Loan Maturity Date”: August 1, 2024(a) prior to the First Amendment Effective Date, the Original Initial Term Loan Maturity Date and (b) from and after the First Amendment Effective Date, the Tranche B Term Loan Maturity Date.

Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

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Installment Date”: as defined in Subsection 2.2(b)(i).

“Insurance Subsidiary”: any Subsidiary of the Borrower (i) that is a Captive Insurance Subsidiary or (ii) whose primary purpose and activity is the assumption of self-insurance risks and activities reasonably related thereto.

Intellectual Property”: as defined in Subsection 5.9.

Intercreditor Agreement Supplement”: as defined in Subsection 10.8(a).

Interest Payment Date”: (a) as to any ABR Loan, the last Business Day of each Fiscal Quarter to occur while such Loan is outstanding, and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) as to any Eurodollar Loan having an Interest Period longer than three months, (i) each day which is three months, or a whole multiple thereof, after the first day of such Interest Period and (ii) the last day of such Interest Period.

Interest Period”: with respect to any Eurodollar Loan:

(a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending (x) one, two, three or six months (or if agreed to by each affected Lender, 12 months or a shorter period) thereafter or, (y) on the last day of the first fiscal quarter ending after the Closing Date or (z) on the last day of the first or the first full fiscal quarter ending after the First Amendment Effective Date, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and

(b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months (or if agreed to by each affected Lender, 12 months or a shorter period) thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days (or such shorter period as may be agreed by the Administrative Agent in its reasonable discretion) prior to the last day of the then current Interest Period with respect thereto; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(ii) any Interest Period that would otherwise extend beyond the applicable Maturity Date shall (for all purposes other than Subsection 4.12) end on the applicable Maturity Date; and

(iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and.

 

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(iv) the Borrower shall select Interest Periods so as not to require a scheduled payment of any Eurodollar Loan during an Interest Period for such Eurodollar Loan.

Interest Rate Agreement”: with respect to any Person, any interest rate protection agreement, future agreement, option agreement, swap agreement, cap agreement, collar agreement, hedge agreement or other similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is a party or a beneficiary.

“Intermediate GP”: Core & Main Intermediate GP, LLC, a Delaware limited liability company, and any successor in interest thereto.

Interpolated Screen Rate”: in relation to the LIBOR Rate for any Loan, the rate which results from interpolating on a linear basis between: (a) the rate appearing on the ICE Benchmark Administration page (or on any successor or substitute page of such service) for the longest period (for which that rate is available) which is less than the Interest Period and (b) the rate appearing on the ICE Benchmark Administration page (or on any successor or substitute page of such service) for the shortest period (for which that rate is available) which exceeds the Interest Period, each as of approximately 11:00 A.M., London time, two Business Days prior to the commencement of such Interest Period.

Inventory”: goods held for sale, lease or use by a Person in the ordinary course of business, net of any reserve for goods that have been segregated by such Person to be returned to the applicable vendor for credit, as determined in accordance with GAAP.

Investment”: in any Person by any other Person, any direct or indirect advance, loan or other extension of credit (other than to customers, dealers, distributors, licensees, franchisees, suppliers, consultants, directors, officers or employees of any Person in the ordinary course of business) or capital contribution (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others) to, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person. For purposes of the definition of “Unrestricted Subsidiary” and Subsection 8.2 only, (i) “Investment” shall include the portion (proportionate to the Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary, provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (x) the Borrower’s “Investment” in such Subsidiary at the time of such redesignation less (y) the portion (proportionate to the Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation, (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value (as determined in good faith by the Borrower, which determination shall be conclusive) at the time of such transfer and (iii) for purposes of Subsection 8.2(a)(3)(C), the amount resulting from the redesignation of any Unrestricted Subsidiary as a Restricted

 

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Subsidiary shall be the Fair Market Value of the Investment in such Unrestricted Subsidiary at the time of such redesignation. Guarantees shall not be deemed to be Investments. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Borrower’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment; provided that to the extent that the amount of Restricted Payments outstanding at any time pursuant to Subsection 8.2(a) is so reduced by any portion of any such amount or value that would otherwise be included in the calculation of Consolidated Net Income, such portion of such amount or value shall not be so included for purposes of calculating the amount of Restricted Payments that may be made pursuant to Subsection 8.2(a).

Investment Company Act”: the Investment Company Act of 1940, as amended from time to time.

Investment Grade Rating”: a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or any equivalent rating by any other Rating Agencynationally recognized rating agency.

Investment Grade Securities”: (i) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents); (ii) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Borrower and its Subsidiaries; (iii) investments in any fund that invests exclusively in investments of the type described in clauses (i) and (ii) above, which fund may also hold cash pending investment or distribution; and (iv) corresponding instruments in countries other than the United States customarily utilized for high quality investments.

IPO Vehicle”: (a) anPubco and/or any other entity formed or designated for the purpose of facilitating an issuance or sale of common equity interests (which represent an indirect economic and/or voting interest in the Borrower or a Parent Entity and through which investors shall indirectly hold their equity interests in the Borrower or a Parent Entity) in an underwritten public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary public offering) and such equity interests are listed on a nationally-recognized stock exchange in the U.S. and (banyNew Blocker, the Pubco Merger Subs and/or any Wholly Owned Subsidiary of the entity referred to in clause (a) above other than a Parent Entity or any Subsidiary of a Parent Entity (including the Pubco Merger Subs) (unless the entity in clause (a) is a Parent Entity, in which case other than the Borrower or any Subsidiary thereof).

Investors”: as defined in the definition of “Equity Contribution”.

“ISDA CDS Definitions”: as defined in Subsection 11.1(k).

Judgment Conversion Date”: as defined in Subsection 11.8(a).

Judgment Currency”: as defined in Subsection 11.8(a).

 

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Junior Capital”: collectively, any Indebtedness of any Parent Entity or IPO Vehicle or the Borrower that (i) is not secured by any asset of the Borrower or any Restricted Subsidiary, (ii) is expressly subordinated to the prior payment in full of the Term Loan Facility Obligations hereunder on terms consistent with those for senior subordinated high yield debt securities issued by U.S. companies sponsored by CD&R (as determined in good faith by the Borrower, which determination shall be conclusive), (iii) has a final maturity date that is not earlier than, and provides for no scheduled payments of principal prior to, the date that is 91 days after the Initial Term Loan Maturity Date (other than through conversion or exchange of any such Indebtedness for Capital Stock (other than Disqualified Stock) of the Borrower, Capital Stock of any Parent Entity or IPO Vehicle or any other Junior Capital), (iv) has no mandatory redemption or prepayment obligations other than (a) obligations that are subject to the prior payment in full in cash of the Term Loans and (b) pursuant to an escrow or similar arrangement with respect to the proceeds of such Junior Capital and (v) does not require the payment of cash interest until the date that is 91 days after the Initial Term Loan Maturity Date.

Junior Debt”: (i) the Senior Notes (and Refinancing Indebtedness in respect thereof Incurred pursuant to Subsection 8.1(b)(iii)) and (iiany Subordinated Obligations and Guarantor Subordinated Obligations.

Junior Lien Intercreditor Agreement”: an intercreditor agreement substantially in the form of Exhibit J-2 to be entered into as required by the terms hereof, as amended, supplemented, waived or otherwise modified from time to time.

LCT Election”: as defined in Subsection 1.2(j).

LCT Test Date”: as defined in Subsection 1.2(j).

Lead Arrangers”: JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Barclays Bank PLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Royal Bank of Canada, Goldman Sachs Bank USA, Natixis, New York Branch and Nomura Securities International, Inc. as Joint Lead Arrangers.

Lender Default”: (a) the refusal (which may be given verbally or in writing and has not been retracted) or failure of any Lender (including any Agent in its capacity as Lender) to make available its portion of any incurrence of Loans, which refusal or failure is not cured within two Business Days after the date of such refusal or failure, (b) the failure of any Lender (including any Agent in its capacity as Lender) to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, (c) a Lender (including any Agent in its capacity as Lender) has notified the Borrower or the Administrative Agent that it does not intend to comply with its funding obligations hereunder, (d) a Lender (including any Agent in its capacity as Lender) has failed, within 10 Business Days after request by the Administrative Agent, to confirm that it will comply with its funding obligations hereunder (provided that such Lender Default pursuant to this clause (d) shall cease to be a Lender Default upon receipt of such confirmation by the Administrative Agent) or (e) an Agent or a Lender has admitted in writing that it is insolvent or such Agent or Lender becomes subject to a Lender-Related Distress Event or Bail-In Action.

 

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Lender Joinder Agreement”: as defined in Subsection 2.8(c).

Lender-Related Distress Event”: with respect to any Agent or Lender (each, a “Distressed Person”), a voluntary or involuntary case with respect to such Distressed Person under any debt relief law, or a custodian, conservator, receiver or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets, or such Distressed Person makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Distressed Person to be, insolvent or bankrupt; provided that a Lender-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any equity interests in any Agent or Lender or any person that directly or indirectly controls such Agent or Lender by a Governmental Authority or an instrumentality thereof; provided, further, that the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator with respect to an Agent or Lender or any other person that directly or indirectly controls such Agent or Lender under the Dutch Financial Supervision Act 2007 (as amended from time to time and including any successor legislation) shall not be deemed to be a “Lender-Related Distress Event” with respect to such Agent or Lender or any person that directly or indirectly controls such Agent or Lender.

Lenders”: the several lenders from time to time parties to this Agreement together with, in the case of any such lender that is a bank or financial institution, any affiliate of any such bank or financial institution through which such bank or financial institution elects, by notice to the Administrative Agent and the Borrower, to make any Loans available to the Borrower, provided that for all purposes of voting or consenting with respect to (a) any amendment, supplementationsupplement or modification of or to any Loan Document, (b) any waiver of any of the requirements of any Loan Document or any Default or Event of Default and its consequences or (c) any other matter as to which a Lender may vote or consent pursuant to Subsection 11.1, the bank or financial institution making such election shall be deemed the “Lender” rather than such affiliate, which shall not be entitled to so vote or consent.

Letter of Credit Facility”: any facility, in each case with one or more banks or other lenders, institutions or financing providers providing for letters of credit or bank guarantees, in each case including all agreements, instruments and documents executed and delivered pursuant to or in connection with any of the foregoing.

Leverage Excess Proceeds”: as defined in Subsection 8.4(b).

Liabilities”: collectively, any and all claims, obligations, liabilities, causes of action, actions, suits, proceedings, investigations, judgments, decrees, losses, damages, fees, costs and expenses (including interest, penalties and fees and disbursements of attorneys, accountants, investment bankers and other professional advisors), in each case whether incurred, arising or existing with respect to third parties or otherwise at any time or from time to time.

 

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LIBOR Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined by the Administrative Agent to be:

(a) the London Interbank Offered Rate for deposits in Dollars for a duration equal to or comparable to the duration of such Interest Period which appear on the relevant Reuters Monitor Money Rates Service page for the applicable currency (being currently the page designated as “LIBO”) (or such other commercially available source providing quotations of the London Interbank Offered Rates for deposits in Dollars as may be designated by the Administrative Agent from time to time and as consented to by the Borrower) at or about 11:00 A.M. (London time) two London Business Days before the first day of such Interest Period; or

(b) if no such page (or other source) is available, the Interpolated Screen Rate; or

(c) if no such page (or other source) is available and it is not possible to calculate an Interpolated Screen Rate for the applicable Loan, (x) the arithmetic mean of the rates per annum as supplied to the Administrative Agent at its request quoted by the Reference Banks to leading banks in the London interbank market two London Business Days before the first day of such Interest Period for deposits in Dollars of a duration equal to the duration of such Interest Period; provided that any Reference Bank that has failed to provide a quote in accordance with Subsection 4.6(c) shall be disregarded for purposes of determining the mean or (y) if consented to by the Borrower, the average of the rates per annum quoted by the Administrative Agent to leading banks in the London interbank market at or about 11:00 A.M. (London time) two London Business Days before the first day of such Interest Period for deposits in Dollars of a duration equal to the duration of such Interest Period.

If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in Subsection 4.7 have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in Subsection 4.7 have not arisen but the supervisor for the administrator of the London Interbank Offered Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the London Interbank Offered Rate shall no longer be used for determining interest rates for loans in Dollars or the applicable Designated Foreign Currency, then, at the Borrower’s request, the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the LIBOR Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (including amendments to the Applicable Margin to preserve the terms of the economic transactions initially agreed to among the Borrower, on the one hand, and the Lenders on the other hand (including with respect to impact of any “floors”)). Notwithstanding anything to the contrary herein, such amendment shall become effective without any further action or consent of any other party to this Agreement.

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

 

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Limited Condition Transaction”: (x) any acquisition, including by way of merger, amalgamation, consolidation or other business combination or the acquisition of Capital Stock or otherwise, of any assets, business or Person, or any other Investment by one or more of the Borrower and its Subsidiaries of any assets, business or Person or any other Investment permitted by this Agreement, in each case, whose consummation is not conditioned on the availability of, or on obtaining, third party financing or (y) any redemption, repurchase, defeasance, satisfaction and discharge or repayment of Indebtedness, Disqualified Stock or Preferred Stock requiring irrevocable notice in advance of such redemption, repurchase, defeasance, satisfaction and discharge or repayment.

Loan”: each Initial Term Loan, Incremental Term Loan, Extended Term Loan, Specified Refinancing Term Loan or Incremental Revolving Loan, as the context shall require; collectively, the “Loans.”

Loan Documents”: this Agreement, any Notes, the Guarantee and Collateral Agreement, the ABL/Term Loan Intercreditor Agreement, any Junior Lien Intercreditor Agreement (on and after the execution thereof), each Other Intercreditor Agreement (on and after the execution thereof) and any other Security Documents, each as amended, supplemented, waived or otherwise modified from time to time.

Loan Parties”: each Holding Company (orincluding, in each case, any Successor Holding Company in respect thereof pursuant to and as defined in Subsection 9.16(e) of the Guarantee and Collateral Agreement) (unless and until such Holding Company is released from all of its obligations pursuant to Subsection 9.16(h) of the Guarantee and Collateral Agreement), the Borrower and the Subsidiary Guarantors; each individually, a “Loan Party.”

Management Advances”: (1) loans or advances made to directors, management members, officers, employees or consultants of any Parent Entity, IPO Vehicle, the Borrower or any Restricted Subsidiary (x) in respect of travel, entertainment or moving related expenses incurred in the ordinary course of business, (y) in respect of moving related expenses incurred in connection with any closing or consolidation of any facility, or (z) in the ordinary course of business and (in the case of this clause (z)) not exceeding $15,000,000the greater of $30,000,000 and 2.00% of Consolidated Tangible Assets in the aggregate outstanding at any time, (2) promissory notes of Management Investors acquired in connection with the issuance of Management Stock to such Management Investors, (3) Management Guarantees, or (4) other Guarantees of borrowings by Management Investors in connection with the purchase of Management Stock, which Guarantees are permitted under Subsection 8.1.

Management Guarantees”: guarantees (x) of up to an aggregate principal amount outstanding at any time of $30,000,000the greater of $60,000,000 and 4.00% of Consolidated Tangible Assets of borrowings by Management Investors in connection with their purchase of Management Stock or (y) made on behalf of, or in respect of loans or advances made to, directors, officers, employees, management members or consultants of any Parent Entity, IPO Vehicle, the Borrower or any Restricted Subsidiary (1) in respect of travel, entertainment and moving related expenses incurred in the ordinary course of business, or (2) in the ordinary course of business and (in the case of this clause (2)) not exceeding $10,000,000the greater of $20,000,000 and 1.50% of Consolidated Tangible Assets in the aggregate outstanding at any time.

 

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Management Holdings”: Core & Main Management Feeder, LLC (formerly known as CD&R Waterworks Management Feeder, LLC), a Delaware limited liability company, and any successor in interest thereto.

Management Indebtedness”: Indebtedness Incurred to (a) any Person other than a Management Investor of up to an aggregate principal amount outstanding at any time of $25,000,000the greater of $50,000,000 and 3.50% of Consolidated Tangible Assets, and (b) any Management Investor, in each case, to finance the repurchase or other acquisition of Capital Stock of the Borrower, any Restricted Subsidiary, any Parent Entity or IPO Vehicle (including any options, warrants or other rights in respect thereof) Management Stock from any Management Investor, which repurchase or other acquisition of Capital Stock is permitted by Subsection 8.2.

Management Investors”: the current or former management members, officers, directors, employees and other members of the management of any Parent Entity, IPO Vehicle, the Borrower or any of their respective Subsidiaries, or family members or relatives of any of the foregoing (provided that, solely for purposes of the definition of “Permitted Holders”, such relatives shall include only those Persons who are or become Management Investors in connection with estate planning for or inheritance from other Management Investors, as determined in good faith by the Borrower, which determination shall be conclusive), or trusts, partnerships or limited liability companies for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Borrower, any Restricted Subsidiary,of its Subsidiaries or any Parent Entity or IPO Vehicle (including any options, warrants or other rights in respect thereof).

Management Stock”: Capital Stock of the Borrower, any Restricted Subsidiary, or any Parent Entity or IPO Vehicle (including any options, warrants or other rights in respect thereof) held by any of the Management Investors.

Margin Stock”: as defined in Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

Market Capitalization”: an amount equal to (i) the total number of issued and outstanding shares of capital stock of the Borrower, any Parent Entity or IPO Vehicle (including all shares of Capital Stock of such Parent Entity or IPO Vehicle reserved for issuance upon conversion or exchange of Capital Stock of another Parent Entity or IPO Vehicle outstanding on such date) on the date of declaration of the relevant dividend or making of any other Restricted Payment, as applicable, multiplied by (ii) the arithmetic mean of the closing prices per share of such capital stock on the New York Stock Exchange (or, if the primary listing of such capital stock is on another exchange, on such other exchange) for the 30 consecutive trading days immediately preceding such date.

 

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Material Adverse Effect”: (x) on, or as of, the Closing Date, a Closing Date Material Adverse Effect, or (y) after the Closing Date, a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of the Borrower and its Restricted Subsidiaries taken as a whole (other than resulting from any event, development or circumstance related to the COVID-19 pandemic that was disclosed to the Lenders on or prior to the First Amendment Effective Date), (b) the validity or enforceability as to the Loan Parties (taken as a whole) party thereto of the Loan Documents taken as a whole or (c) the rights or remedies of the Agents and the Lenders under the Loan Documents, in each case, taken as a whole.

Material Subsidiaries”: Restricted Subsidiaries of the Borrower constituting, individually or in the aggregate (as if such Restricted Subsidiaries constituted a single Subsidiary), a “significant subsidiary” in accordance with Rule 1-02 under Regulation S-X.

Materials of Environmental Concern”: any pollutants, contaminants, hazardous or toxic substances or materials or wastes defined, listed, or regulated as such in or under, or which may give rise to liability under, any applicable Environmental Law, including gasoline, petroleum (including crude oil or any fraction thereof), petroleum products or by-products, asbestos and polychlorinated biphenyls.

Maturity Date”: the Initial Term Loan Maturity Date, for any Extended Tranche the “Maturity Date” set forth in the applicable Extension Amendment, for any Incremental Commitments the “Maturity Date” set forth in the applicable Incremental Commitment Amendment and for any Specified Refinancing Tranche the “Maturity Date” set forth in the applicable Specified Refinancing Amendment, in each case as the context may require.

Maximum Incremental Facilities Amount”: at any date of determination, the sum of (i) an amount equal to the greater of (1) $225,000,000400,000,000 and (2) Four Quarter Consolidated EBITDA (amounts Incurred pursuant to this clause (i), the “Cash Capped Incremental Facility”) plus (ii) an unlimited amount if, after giving effect to the Incurrence of such amount (or, at the Borrower’s option, on the date of the initial commitment to lend such additional amount after giving pro forma effect to the Incurrence of the entire committed amount of such additional amount), either (x) the Consolidated Secured Leverage Ratio shall not exceed 4.753.75 to 1.00 (or (y) in the case of Indebtedness being Incurred to finance or refinance, or otherwise Incurred in connection with, any acquisition of assets (including Capital Stock), business or Person, or any merger or consolidation of any Person with or into the Borrower or any Restricted Subsidiary, or any other Investment, the Consolidated Secured Leverage Ratio of the Borrower would equal or be less than the Consolidated Secured Leverage Ratio of the Borrower immediately prior to giving effect thereto (in each case under this clause (ii), as set forth in a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent at the time of such Incurrence, together with calculations demonstrating compliance with such ratio (amounts Incurred pursuant to this clause (ii), the “Ratio Incremental Facility”) (it being understood that (A) if pro forma effect is given to the entire committed amount of any such additional amount on the date of initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness, such committed amount may thereafter be borrowed and reborrowed in whole or in part, from time to time, without further compliance with this clause (ii) and (B) for purposes of so calculating the

 

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Consolidated Secured Leverage Ratio under this clause (ii), any additional amount Incurred pursuant to this clause (ii) shall be treated as if such amount is Consolidated Secured Indebtedness, regardless of whether such amount is actually secured or is secured by Liens ranking junior to the Liens securing the Term Loan Facility Obligations)); provided that, at the Borrower’s option, capacity under the Ratio Incremental Facility shall be deemed to be used before capacity under the Cash Capped Incremental Facility.

“MFN Threshold Amount”: the greater of (i) $200,000,000 and (ii) 50.0% of Four Quarter Consolidated EBITDA.

“Midco”: Core & Main Midco, LLC, a Delaware limited liability company, and any successor in interest thereto.

Minimum Exchange Tender Condition”: as defined in Subsection 2.9(b).

Minimum Extension Condition”: as defined in Subsection 2.10(g).

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

Most Recent Four Quarter Period”: the four-fiscal-quarterfour Fiscal Quarter period of the Borrower ending on the last day of the most recently completed fiscal year or Fiscal Quarter for which financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) have been (or have been required to be) delivered under Subsection 7.1(a) or 7.1(b).

Multiemployer Plan”: a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

Net Available Cash”: from an Asset Disposition or Recovery Event, an amount equal to the cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or Recovery Event or received in any other non-cash form) therefrom, in each case net of (i) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Tax Distributions made or to be made and (without duplication) all Federalfederal, state, provincial, foreign and local taxes required to be paid or to be accrued as a liability under GAAP, in each case, as a consequence of, or in respect of, such Asset Disposition or Recovery Event (including as a consequence of any transfer of funds in connection with the application thereof in accordance with Subsection 8.4), (ii) all payments made, and all installment payments required to be made, on any Indebtedness (other than Indebtedness secured by Liens on the Collateral that are required by the express terms of this Agreement to be pari passu with or junior to the Liens on the Collateral securing the Term Loan Facility Obligations) (x) that is secured by any assets subject to such Asset Disposition or involved in such Recovery Event, in accordance with the terms of any Lien upon such assets, or (y) that must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition or Recovery Event, including but not limited to any payments required to be made to increase borrowing availability

 

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under any revolving credit facility, (iii) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition or Recovery Event, or to any other Person (other than the Borrower or a Restricted Subsidiary) owning a beneficial interest in the assets disposed of in such Asset Disposition or subject to such Recovery Event, (iv) any liabilities or obligations associated with the assets disposed of in such Asset Disposition or involved in such Recovery Event and retained, indemnified or insured by the Borrower or any Restricted Subsidiary after such Asset Disposition or Recovery Event, including pension and other post-employment benefit liabilities, liabilities related to environmental matters, and liabilities relating to any indemnification obligations associated with such Asset Disposition or Recovery Event, (v) in the case of an Asset Disposition, the amount of any purchase price or similar adjustment (x) claimed by any Person to be owed by the Borrower or any Restricted Subsidiary, until such time as such claim shall have been settled or otherwise finally resolved, or (y) paid or payable by the Borrower or any Restricted Subsidiary, in each case in respect of such Asset Disposition and (vi) in the case of any Recovery Event, any amount thereof that constitutes or represents reimbursement or compensation for any amount previously paid or to be paid by the Borrower or any of its Subsidiaries.

Net Available Cash Amount”: as defined in Subsection 8.4(a)(iii).

Net Cash Proceeds”: with respect to any issuance or sale of any securities of, or the Incurrence of Indebtedness by, the Borrower or any Subsidiary, or any capital contribution to the Borrower or any Subsidiary, the cash proceeds of such issuance, sale, Incurrence or contribution received by the Borrower or such Subsidiary net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance, sale, contribution or Incurrence and net of Tax Distributions made or to be made and all taxes paid or payable as a result, or in respect, thereof.

“Net Short Lender”: as defined in Subsection 11.1(k).

“Net Short Lender Default Breach”: as defined in Subsection 11.1(k).

“Net Short Lender Verification Covenant”: as defined in Subsection 11.1(k).

New Blocker”: CD&R WW, LLC, a Delaware limited liability company, and any successor in interest thereto.

New Blocker Holdings”: CD&R WW Holdings, LLC, a Delaware limited liability company, and any successor in interest thereto.

“New Tranche B Term Lenders”: as defined in Subsection 2.1(c)(i).

“New Tranche B Term Loan”: as defined in Subsection 2.1(c)(i).

New York Courts”: as defined in Subsection 11.13(a).

New York Supreme Court”: as defined in Subsection 11.13(a).

 

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Non-Consenting Lender”: as defined in Subsection 11.1(g).

Non-Defaulting Lender”: any Lender other than a Defaulting Lender.

“Non-Exchanging Term Lender”: as defined in Subsection 2.1(c)(ii).

Non-Excluded Taxes”: all Taxes other than Excluded Taxes.

Non-Extending Lender”: as defined in Subsection 2.10(e).

Non-Extension Notice Date”: as defined in Subsection 2.6(j).

Non-Wholly Owned Subsidiary”: each Subsidiary that is not a Wholly Owned Subsidiary.

Note”: as defined in Subsection 2.2(a).

NYFRB”: the Federal Reserve Bank of New York.

NYFRB Rate”: for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.mA.M. (New York City time) on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Obligation Currency”: as defined in Subsection 11.8(a).

Obligations”: with respect to any Indebtedness, any principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Borrower or any Restricted Subsidiary whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, Guarantees of such Indebtedness (or of Obligations in respect thereof), other monetary obligations of any nature and all other amounts payable thereunder or in respect thereof.

OFAC”: as defined in clause (c) of the first sentence of Subsection 5.21(b).

Offered Amount”: as defined in Subsection 4.4(l)(iv)(1).

Offered Discount”: as defined in Subsection 4.4(l)(iv)(1).

OID”: as defined in Subsection 2.8(d).

 

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Organizational Documents”: with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person and (b) the bylaws, operating agreement or partnership agreement (or the equivalent governing documents) of such Person.

“Original Initial Term Loan”: as defined in Subsection 2.1(a).

“Original Initial Term Loan Commitment”: as to any Lender, its obligation to make Original Initial Term Loans to the Borrower pursuant to Subsection 2.1(a) in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A under the heading “Original Initial Term Loan Commitment”; collectively, as to all the Lenders, the “Original Initial Term Loan Commitments”. The original aggregate amount of the Original Initial Term Loan Commitments on the Closing Date is $1,075,000,000.

“Original Initial Term Loan Maturity Date”: August 1, 2024.

Other Intercreditor Agreement”: an intercreditor agreement in form and substance reasonably satisfactory to the Borrower and the Collateral Agent.

Other Representatives”: JPMorgan Chase Bank, N.A., in its capacity as Joint Lead Arranger and Joint Bookrunner, Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as Joint Lead Arranger and Joint Bookrunner, Citigroup Global Markets Inc., in its capacity as Joint Lead Arranger and Joint Bookrunner, Barclays Bank PLC, in its capacity as Joint Lead Arranger and Joint Bookrunner, Credit Suisse Securities (USA) LLC, in its capacity as Joint Lead Arranger and Joint Bookrunner, Deutsche Bank Securities Inc., in its capacity Joint Lead Arranger and Joint Bookrunner, Royal Bank of Canada, in its capacity as Joint Lead Arranger and Joint Bookrunner, Goldman Sachs Bank USA, in its capacity as Joint Lead Arranger and Joint Bookrunner, Natixis, New York Branch, in its capacity as Joint Lead Arranger and Joint Bookrunner, and Nomura Securities International, Inc., in its capacity as Joint Lead Arranger and Joint Bookrunner.

Outstanding Amount”: with respect to the Loans on any date, the principal amount thereof after giving effect to any borrowings and prepayments or repayments thereof occurring on such date.

Overnight Bank Funding Rate”: for any day, the rate comprised of both overnight federal funds and overnight eurodollar borrowings by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

Parent Entity”: any of Blocker Holdings, Passthrough Holdings, Management Holdings and , Waterworks Holdings, Pubco, New Blocker, Topco, Core & Main Buyer, Core & Main Connector, the Holding Companies (including, in each case, any Successor Holding Company pursuant to and as defined in Subsection 9.16(e) of the Guarantee and Collateral Agreement), any Other Parent and any other Person that is a Subsidiary of Blocker Holdings, Passthrough Holdings, Management Holdings, Waterworks Holdings, Pubco, New Blocker, Topco, Core & Main Buyer, Core & Main Connector, any Holding Company (including, in each case, any Successor Holding Company pursuant to and as defined in Subsection 9.16(e) of the

 

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Guarantee and Collateral Agreement) or any Other Parent and of which the Borrower is a Subsidiary, in each case, solely for so long as the Borrower isremains a Subsidiary of such Person. As used herein, “Other Parent” means a Person (which may be an IPO Vehicle) of which the Borrower is or becomes a Subsidiary after the Closing Date that is designated by the Borrower as an “Other Parent” after the Closing Date; provided that either (x) immediately after the Borrower first becomes a Subsidiary of such Person, more than 50.0% of the Voting Stock of such Person shall be held by one or more Persons that held more than 50.0% of the Voting Stock of the Borrower or a Parent Entity of the Borrower immediately prior to the Borrower first becoming such Subsidiary, (y) such Person shall be deemed not to be an Other Parent for the purpose of determining whether a Change of Control shall have occurred by reason of the Borrower first becoming a Subsidiary of such Person, or (z) in the case of an IPO Vehicle, no Change of Control shall have occurred in treating such IPO Vehicle as if it were a Parent Entity both before and after giving effect to the Borrower becoming a Subsidiary of such IPO Vehicle. The Borrower shall not in any event be deemed to be a “Parent Entity.”

Parent Expenses”: (i) costs (including all professional fees and expenses) incurred by any Parent Entity or IPO Vehicle in connection with maintaining its existence or in connection with its reporting obligations under, or in connection with compliance with, applicable laws or applicable rules of any governmental, regulatory or self-regulatory body or stock exchange, this Agreement or any other agreement or instrument relating to Indebtedness of the Borrower or any Restricted Subsidiary, including in respect of any reports filed with respect to the Securities Act, the Exchange Act or the respective rules and regulations promulgated thereunder, (ii) expenses incurred by any Parent Entity or IPO Vehicle in connection with the acquisition, development, maintenance, ownership, prosecution, protection and defense of its intellectual property and associated rights (including but not limited to trademarks, service marks, trade names, trade dress, patents, copyrights and similar rights, including registrations and registration or renewal applications in respect thereof; inventions, processes, designs, formulae, trade secrets, know-how, confidential information, computer software, data and documentation, and any other intellectual property rights; and licenses of any of the foregoing) or assertions of infringement, misappropriation, dilution or other violation of third-party intellectual property or associated rights, to the extent such intellectual property and associated rights or assertions relate to the business or businesses of the Borrower or any Subsidiary thereof, (iii) indemnification obligations of any Parent Entity or IPO Vehicle owing to directors, officers, employees or other Persons under its charter or by-laws (or equivalent) or pursuant to written agreements with or for the benefit of any such Person (including the CD&R Indemnification Agreement), or obligations in respect of director and officer insurance (including premiums therefor), (iv) other administrative and operational expenses of any Parent Entity or IPO Vehicle incurred in the ordinary course of business, (v) fees and expenses incurred by any Parent Entity or IPO Vehicle in connection with maintenance and implementation of any management equity incentive plan associated with the management of the Borrower and its Subsidiaries, and (vi) fees and expenses incurred by any Parent Entity or IPO Vehicle in connection with any offering of Capital Stock or Indebtedness, (w) which offering is not completed, or (x) where the net proceeds of such offering are intended to be received by or contributed or loaned to the Borrower or a Restricted Subsidiary, or (y) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received, contributed or loaned, or (z) otherwise on an interim basis prior to completion of such offering so long as any Parent Entity or IPO Vehicle shall cause the amount of such expenses to be repaid to the Borrower or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed.

 

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Pari Passu Indebtedness”: any Indebtedness secured by a Lien on the Collateral ranking pari passu with the Liens securing the Term Loan Facility Obligations.

Participant”: as defined in Subsection 11.6(c)(i).

Participant Register”: as defined in Subsection 11.6(b)(v).

Participating Lender”: as defined in Subsection 4.4(l)(iii)(2).

Passthrough Holdings”: CD&R Plumb Buyer, LLC, a Delaware limited liability company, and any successor in interest thereto.

Passthrough Mergersub”: as defined in the Preamble hereto, and any successor in interest thereto.

Patriot Act”: as defined in Subsection 11.18.

PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).

Permitted Affiliated Assignee”: (i) CD&R, and any investment fund managed or controlled by CD&R and, (ii) any special purpose vehicle established by CD&R or by one or more of such investment funds managed or controlled by CD&R and (iii) any Parent Entity.

Permitted Cure Securities”: common equity securities of the Borrower or any Parent Entity or other qualified equity securities of the Borrower or any Parent Entity that do not constitute Disqualified Stock.

Permitted Debt Exchange”: as defined in Subsection 2.9(a).

Permitted Debt Exchange Notes”: as defined in Subsection 2.9(a).

Permitted Debt Exchange Offer”: as defined in Subsection 2.9(a).

Permitted Holders”: any of the following: (i) any of the CD&R Investors; (ii) any of the Management Investors, CD&R and their respective Affiliates; (iii) any investment fund or vehicle managed, sponsored or advised by CD&R or any Affiliate thereof, and any Affiliate of or successor to any such investment fund or vehicle; (iv) any limited or general partners of, or other investors in, any CD&R Investor or any Affiliate thereof, or any such investment fund or vehicle; (v) any “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date) of which any of the Persons specified in clause (i), (ii), (iii) or (iv) above is a member (provided that (without giving effect to the existence of such “group” or any other “group”) one or more of such Persons collectively have beneficial ownership, directly or indirectly, of more than 50.0% of the total voting power of the Voting Stock of the Borrower or theany Parent Entity held by such “group”), and any other

 

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Person that is a member of such “group”; (vi) any Person acting in the capacity of an underwriter (solely to the extent that and for so long as such Person is acting in such capacity) in connection with a public or private offering of Capital Stock of the Borrower or any Parent Entity, or IPO Vehicle or the Borrower; and (vii) unless and until it constitutes a Parent Entity, any IPO Vehicle (provided that no “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date), other than one or more “Permitted Holders” described in the preceding clauses (i) through (vi), has beneficial ownership (as defined in Rules 13d-3 and 13-d5 under the Exchange Act as in effect on the Closing Date), directly or indirectly, of more than 50.0% of the total voting power of voting stock of such IPO Vehicle). In addition, any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date) whose status as a “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date) constitutes or results in a Change of Control in respect of which the Borrower makes a Change of Control Offer pursuant to Subsection 8.8(a) (whether or not in connection with any repayment or repurchase of Indebtedness outstanding pursuant to Junior Debt), together with its Affiliates, shall thereafter constitute Permitted Holders.

Permitted Investment”: an Investment by the Borrower or any Restricted Subsidiary in, or consisting of, any of the following:

(i) a Restricted Subsidiary, the Borrower, or a Person that will, upon the making of such Investment, become a Restricted Subsidiary (and any Investment held by such Person that was not acquired by such Person, or made pursuant to a commitment by such Person that was not entered into, in contemplation of so becoming a Restricted Subsidiary);

(ii) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, or is liquidated into, the Borrower or a Restricted Subsidiary (and, in each case, any Investment held by such other Person that was not acquired by such Person, or made pursuant to a commitment by such Person that was not entered into, in contemplation of such merger, consolidation or transfer);

(iii) Temporary Cash Investments, Investment Grade Securities or Cash Equivalents;

(iv) receivables owing to the Borrower or any Restricted Subsidiary, if created or acquired in the ordinary course of business;

(v) any securities or other Investments received as consideration in, or retained in connection with, sales or other dispositions of property or assets, including Asset Dispositions made in compliance with Subsection 8.4;

(vi) securities or other Investments received in settlement of debts created in the ordinary course of business and owing to, or of other claims asserted by, the Borrower or any Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction of judgments, including in connection with any bankruptcy proceeding or other reorganization of another Person;

 

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(vii) Investments in existence or made pursuant to legally binding written commitments in existence on the Closing Date and set forth on Schedule 1.1(a), and, in each case, any extension, modification, replacement, reinvestment or renewal thereof; provided that the amount of any such Investment may be increased in such extension, modification, replacement, reinvestment or renewal only (x) as required by the terms of such Investment or binding commitment as in existence on the Closing Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (y) as otherwise permitted by this Agreement;

(viii) Currency Agreements, Interest Rate Agreements, Commodities Agreements and related Hedging Obligations, which obligations are Incurred in compliance with Subsection 8.1;

(ix) pledges or deposits (x) with respect to leases or utilities provided to third parties in the ordinary course of business or (y) otherwise described in the definition of “Permitted Liens” or made in connection with Liens permitted under Subsection 8.6;

(x) (1) Investments in or by any Special Purpose Subsidiary, or in connection with a Financing Disposition by, to, in or in favor of any Special Purpose Entity, including Investments of funds held in accounts permitted or required by the arrangements governing such Financing Disposition or any related Indebtedness, or (2) any promissory note issued by the Borrower or any Parent Entity; provided that if such Parent Entity receives cash from the relevant Special Purpose Entity in exchange for such note, an equal cash amount is contributed by any Parent Entity to the Borrower;

(xi) bonds secured by assets leased to and operated by the Borrower or any Restricted Subsidiary that were issued in connection with the financing of such assets so long as the Borrower or any Restricted Subsidiary may obtain title to such assets at any time by paying a nominal fee, canceling such bonds and terminating the transaction;

(xii) [reserved];

(xiii) any Investment to the extent made using Capital Stock of the Borrower (other than Disqualified Stock), Capital Stock of any Parent Entity or IPO Vehicle or Junior Capital as consideration;

(xiv) Management Advances;

(xv) Investments in Related Businesses in an aggregate amount outstanding at any time not to exceed an amount equal to the greater of $125,000,000272,500,000 and 16.50% of Consolidated Tangible Assets;

(xvi) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Subsection 8.5(b) (except transactions described in clauses (i), (ii)(4), (iii), (v), (vi), (ix) and (x) therein), including any Investment pursuant to any transaction described in Subsection 8.5(b)(ii) (whether or not any Person party thereto is at any time an Affiliate of the Borrower);

 

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(xvii) any Investment by any Captive Insurance Subsidiary in connection with the provision of insurance to the Borrower or any of its Subsidiaries;

(xviii) other Investments in an aggregate amount outstanding at any time not to exceed an amount equal to the greater of $125,000,000272,500,000 and 16.50% of Consolidated Tangible Assets; and

(xix) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and similar deposits entered into as a result of the operations of the business of the Borrower and its Subsidiaries in the ordinary course of business or consistent with past practice.;

(xx) Investments consisting of purchases or other acquisitions of inventory, supplies, services, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(xxi) any Investment in any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business or consistent with past practice; and

(xxii) Investments made in the ordinary course of business or consistent with past practice in connection with obtaining, maintaining or renewing client contracts and loans or advances made to distributors in the ordinary course of business or consistent with past practice.

If any Investment pursuant to clause (xv) or (xviii) above, or Subsection 8.2(b)(vi) or 8.2(b)(xv), as applicable, is made in any Person that is not a Restricted Subsidiary and such Person thereafter (A) becomes a Restricted Subsidiary or (B) is merged or consolidated into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Borrower or a Restricted Subsidiary, then such Investment shall thereafter be deemed to have been made pursuant to clause (i) or (ii) above, respectively, and not clause (xv) or (xviii) above, or Subsection 8.2(b)(vi) or 8.2(b)(xv), as applicable, to the extent of such Investment remaining at such Unrestricted Subsidiary immediately after its redesignation as a Restricted Subsidiary.

Permitted Liens”:

(a) Liens for taxes, assessments or other governmental charges not yet delinquent or the nonpayment of which in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Borrower and its Restricted Subsidiaries, taken as a whole, or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower or a Subsidiary thereof, as the case may be, in accordance with GAAP;

 

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(b) Liens with respect to outstanding motor vehicle fines and carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business in respect of obligations that are not known to be overdue for a period of more than 60 days or that are bonded or that are being contested in good faith and by appropriate proceedings or which in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Borrower and its Restricted Subsidiaries, taken as a whole;

(c) pledges, deposits or Liens in connection with workers’ compensation, professional liability insurance, insurance programs, unemployment insurance and other social security and other similar legislation or other insurance-related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements);

(d) pledges, deposits or Liens to secure the performance of bids, tenders, trade, government or other contracts (other than for borrowed money), obligations for utilities, leases, licenses, statutory obligations, completion guarantees, surety, judgment, appeal or performance bonds, other similar bonds, instruments or obligations, and other obligations of a like nature incurred in the ordinary course of business;

(e) (i) easements (including reciprocal easement agreements), rights-of-way, building, zoning and similar restrictions, utility agreements, covenants, reservations, restrictions, encroachments, charges, and other similar encumbrances or title defects or irregularities incurred, or(ii) any other matters that would be disclosed in an accurate survey affecting real property or (iii) leases or subleases granted to others, in the ordinary course of business,, licenses or sublicenses granted, or occupancy agreements granted to others, whether or not of record and whether now in existence or hereafter entered into which do not in the aggregate materially interfere with the ordinary conduct of the business of the Borrower and its Subsidiaries, taken as a whole;

(f) Liens existing on, or provided for under written arrangements existing on, the Closing Date and set forth on Schedule 1.1(b), or (in the case of any such Liens securing Indebtedness of the Borrower or any of its Subsidiaries existing or arising under written arrangements existing on the Closing Date) securing any Refinancing Indebtedness in respect of such Indebtedness (other than Indebtedness Incurred under Subsection 8.1(b)(i) and secured under clause (k)(1) of this definition), so long as the Lien securing such Refinancing Indebtedness is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or under such written arrangements could secure) the original Indebtedness;

(g) (i) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any developer, landlord or other third party on property over which the Borrower or any Restricted Subsidiary of the Borrower has easement rights or on any leased property and subordination or similar agreements relating thereto and (ii) any condemnation or eminent domain proceedings affecting any real property;

 

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(h) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of Hedging Obligations, Bank Products Obligations, Purchase Money Obligations or Financing Lease Obligations Incurred in compliance with Subsection 8.1;

(i) Liens arising out of judgments, decrees, orders or awards in respect of which the Borrower or any Restricted Subsidiary shall in good faith be prosecuting an appeal or proceedings for review, which appeal or proceedings shall not have been finally terminated, or if the period within which such appeal or proceedings may be initiated shall not have expired;

(j) leases, subleases, licenses or, sublicenses or occupancy agreements to or from third parties;

(k) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of (1) Indebtedness Incurred in compliance with Subsection 8.1(b)(i) pursuant to (a) this Agreement and the other Loan Documents, (b) the Senior ABL Facility (provided any such Liens on the Term Loan Priority Collateral rank junior to the Liens securing the Term Loan Facility Obligations on the Term Loan Priority Collateral), (c) any Permitted Debt Exchange Notes (and any Refinancing Indebtedness in respect thereof), (d) any Rollover Indebtedness (and any Refinancing Indebtedness in respect thereof), (e) any Additional Obligations (and any Refinancing Indebtedness in respect thereof) and (f) Letter of Credit Facilities (and any Refinancing Indebtedness in respect thereof), provided, that any Liens on Collateral pursuant to subclause (b), (c), (d) or (e) of this clause (k)(1) shall be subject to the ABL/Term Loan Intercreditor Agreement, any Junior Lien Intercreditor Agreement or an Other Intercreditor Agreement, as applicable, (2) Indebtedness Incurred in compliance with clauses (b)(iv), (b)(v), (b)(vii), (b)(viii), (b)(xi), (b)(xvi) or clauses (b)(iii)(B) and (C) of Subsection 8.1 (other than Refinancing Indebtedness Incurred in respect of Indebtedness described in Subsection 8.1(a) or 8.1(b)(xvii)), (3) any Indebtedness Incurred in compliance with Subsection 8.1(b)(xiii) or (b)(xvii) or (in the case of Refinancing Indebtedness Incurred in respect of Indebtedness described in Subsection 8.1(b)(xvii)) clause (b)(iii)(C) of Subsection 8.1, provided that any Liens securing such Indebtedness shall rank junior to the Liens securing the Term Loan Facility Obligations and shall be subject to the ABL/Term Loan Intercreditor Agreement, a Junior Lien Intercreditor Agreement and/or an Other Intercreditor Agreement, as applicable, (4) (A) Acquisition Indebtedness Incurred in compliance with Subsection 8.1(b)(x) or (xib)(xiv); provided that (x) such Liens are limited to all or part of the same property or assets, including Capital Stock (plus improvements, accessions, proceeds or dividends or distributions in respect thereof, or replacements of any thereof) acquired, or of any Person acquired or merged or consolidated with or into the Borrower or any Restricted Subsidiary, in any transaction to which such Acquisition Indebtedness relates, (y) on the date of the Incurrence of such Indebtedness after giving effect to such Incurrence, the Consolidated Secured Leverage Ratio would equal or be less than the Consolidated Secured Leverage Ratio immediately prior to giving effect thereto or (z) such Liens rank junior to the Liens securing the Term Loan Facility Obligations and shall be subject to the ABL/Term Loan Intercreditor Agreement, a Junior Lien Intercreditor Agreement and/or an Other Intercreditor Agreement, as applicable, or (B) any Refinancing Indebtedness Incurred in respect thereof, (5) Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor (limited, in the case of this clause (k)(5), to Liens on any of the property and assets of any Restricted Subsidiary that is not a Subsidiary Guarantor), or (6) obligations in respect of Management Advances or Management Guarantees, in each case under the foregoing clauses (1) through (6) including Liens securing any Guarantee of any thereof;

 

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(l) Liens existing on property or assets of a Person at, or provided for under written arrangements existing at, the time such Person becomes a Subsidiary of the Borrower (or at the time the Borrower or a Restricted Subsidiary acquires such property or assets, including any acquisition by means of a merger or consolidation with or into the Borrower or any Restricted Subsidiary); provided, however, that such Liens and arrangements are not created in connection with, or in contemplation of, such other Person becoming such a Subsidiary (or such acquisition of such property or assets), and that such Liens are limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate; provided, further, that for purposes of this clause (l), if a Person other than the Borrower is the Successor Borrower with respect thereto, any Subsidiary thereof shall be deemed to become a Subsidiary of the Borrower, and any property or assets of such Person or any such Subsidiary shall be deemed acquired by the Borrower or a Restricted Subsidiary, as the case may be, when such Person becomes such Successor Borrower;

(m) Liens on Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary or any joint venture that secure Indebtedness or other obligations of such Unrestricted Subsidiary or joint venture, respectively;

(n) any encumbrance or restriction (including, but not limited to, pursuant to put and call agreements or buy/sell arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(o) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of Refinancing Indebtedness Incurred in respect of any Indebtedness (other than any Indebtedness described in clause (k)(1) above of this definition) secured by, or securing any refinancing, refunding, extension, renewal or replacement (in whole or in part) of any other obligation secured by, any other Permitted Liens, provided that any such new Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the obligations to which such Liens relate;

(p) Liens (1) arising by operation of law (or by agreement to the same effect) in the ordinary course of business, including Liens arising under or by reason of the Perishable Agricultural Commodities Act of 1930, as amended from time to time, (2) on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets, (3) on Margin Stock, if and to the extent the value of all Margin Stock of the Borrower and its Subsidiaries exceeds 25% of the value of the total assets subject to Subsection 8.6, (4) on cash set aside at the time of the Incurrence of any Indebtedness or government securities purchased with such cash, in either case to the extent that such cash or government securities prefund the payment of interest on such Indebtedness and are held in an escrow account or similar arrangement to be applied for such purpose, (5) securing or arising by reason of any netting or set-off or customer deposit arrangement entered into in the ordinary course of banking or other trading activities (including in connection with purchase orders and other agreements with customers), (6) in favor of the Borrower or any Subsidiary (other than Liens on property or assets of the Borrower or any Subsidiary Guarantor in favor of any Subsidiary that is not a Subsidiary Guarantor), (7) arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods

 

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entered into in the ordinary course of business, (8) on inventory or other goods and proceeds securing obligations in respect of bankers’ acceptances issued or created to facilitate the purchase, shipment or storage of such inventory or other goods, (9) relating to pooled deposit or sweep accounts to permit satisfaction of overdraft, cash pooling or similar obligations incurred in the ordinary course of business, (10) attaching to commodity trading or other brokerage accounts incurred in the ordinary course of business, (11) arising in connection with repurchase agreements permitted under Subsection 8.1 on assets that are the subject of such repurchase agreements, (12in favor of any Special Purpose Entity in connection with any Financing Disposition, (13) on any amounts (including the proceeds of the applicable Indebtedness and any cash, Cash Equivalents and Temporary Cash Investments deposited to cover interest and premium in respect of such Indebtedness) held by a trustee or escrow agent under any indenture or other debt agreement governing Indebtedness issued in escrow pursuant to customary escrow arrangements (as determined by the Borrower in good faith, which determination shall be conclusive) pending the release thereof, or on the proceeds deposited to discharge, redeem or defease Indebtedness under any indenture or other debt agreement pursuant to customary discharge, redemption or defeasance provisions (as determined by the Borrower in good faith, which determination shall be conclusive), pending such discharge, redemption ofor defeasance and after irrevocable notice thereof has been delivered to the applicable trustee or agent or, (1314) on equipment of the Borrower or any of its Restricted Subsidiaries granted in the ordinary course of business to the Borrower’s or a Restricted Subsidiary’s customers; or (15)  (x)  on accounts receivable or notes receivable (including any ancillary rights pertaining thereto) purported to be sold or disposed of in connection with any factoring agreement or similar arrangements to secure obligations owed under such factoring agreement or similar arrangements and (y) any bank accounts used by the Borrower or any Restricted Subsidiary in connection with any factoring agreement or any similar arrangements;

(q) other Liens securing Indebtedness or other obligations that in the aggregate at any time outstanding do not exceed an amount equal to the greater of $75,000,000165,000,000 and 10.00% of Consolidated Tangible Assets at the time of Incurrence of such Indebtedness or other obligations;

(r) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) or other obligations of, or in favor of, any Special Purpose Entity, or in connection with a Special Purpose Financing or otherwise, Incurred pursuant to clause (b)(ix) of Subsection 8.1;

(s) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of Indebtedness Incurred in compliance with Subsection 8.1; provided that on the date of Incurrence of such Indebtedness after giving effect to such Incurrence (or, at the Borrower’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving pro forma effect to the Incurrence of the entire committed amount thereof, in which case such committed amount may thereafter be borrowed and reborrowed in whole or in part, from time to time, without further compliance with this clause), either (x) the Consolidated Secured Leverage Ratio shall not exceed 4.753.75 to 1.00; and or (y) in the case of Liens securing Indebtedness being Incurred to finance or refinance, or otherwise Incurred in connection with any acquisition of assets (including Capital Stock), business or Person, or any merger or consolidation of any Person with or into the Borrower or any Restricted Subsidiary, or any other Investment, the Consolidated Secured Leverage Ratio of the Borrower would equal or be less than the Consolidated Secured Leverage Ratio of the Borrower immediately prior to giving effect thereto; and

 

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(t) Liens on the Collateral, if such Liens rank junior to the Liens on such Collateral in relation to the Lien securing the Loans and the Subsidiary Guarantees, as applicable.

For purposes of determining compliance with this definition, (s) a Lien need not be incurred solely by reference to one category of Permitted Liens described in this definition but may be incurred under any combination of such categories (including in part under one such category and in part under any other such category), (t) the principal amount of Indebtedness secured by a Lien outstanding under any category of Permitted Liens shall be determined after giving effect to the application of proceeds of any such Indebtedness to refinance any such other Indebtedness, (u) in the event that a Lien (or any portion thereof) meets the criteria of one or more of such categories of Permitted Liens, the Borrower shall, in its sole discretion, classify or reclassify such Lien (or any portion thereof) in any manner that complies with this definition, (v) any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness shall also be permitted to secure any increase in the amount of such Indebtedness in connection with the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends on Capital Stock constituting Indebtedness in the form of additional shares of the same class of Capital Stock, (w) in the event that a portion of Indebtedness secured by a Lien could be classified as secured in part pursuant to clause (k)(1) above in respect of Indebtedness Incurred pursuant to the Ratio Incremental Facility (giving effect to the Incurrence of such portion of such Indebtedness), the Borrower, in its sole discretion, may classify such portion of such Indebtedness (and any Obligations in respect thereof) as having been secured pursuant to clause (k)(1) above in respect of Indebtedness Incurred pursuant to the Ratio Incremental Facility and the remainder of the Indebtedness as having been secured pursuant to such clause (k)(1) in respect of Indebtedness Incurred pursuant to Subsection 8.1(b)(i) (other than pursuant to the Ratio Incremental Facility) or one or more of the other clauses or subclauses of this definition (other than clause (s) above), (x) in the event that a portion of Indebtedness secured by a Lien could be classified in part pursuant to clause (s) above (giving effect to the Incurrence of such portion of Indebtedness), the Borrower, in its sole discretion, may classify such portion of Indebtedness (and any Obligations in respect thereof) as having been secured pursuant to clause (s) above and the remainder of the Indebtedness as having been secured pursuant to one or more of the other clauses or subclauses of this definition (other than clause (k)(1) above in respect of Indebtedness Incurred pursuant to the Ratio Incremental Facility), (y) if any Liens securing Indebtedness or other obligations are Incurred to refinance Liens securing Indebtedness or other obligations initially Incurred (or, to refinance Liens Incurred to refinance Liens initially Incurred) in reliance on any category of Permitted Liens measured by reference to a percentage of Consolidated Tangible Assets at the time of Incurrence of such Indebtedness or other obligation, and is refinanced by any Indebtedness or other obligation secured by any Lien incurred by reference to such category of Permitted Liens, and such refinancing (or any subsequent refinancing) would cause the percentage of Consolidated Tangible Assets to be exceeded if calculated based on the Consolidated Tangible Assets on the date of such

 

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refinancing, such percentage of Consolidated Tangible Assets shall not be deemed to be exceeded (and such refinancing Lien shall be deemed permitted) so long as the principal amount of such refinancing Indebtedness or other obligation does not exceed an amount equal to the principal amount of such Indebtedness or other obligation being refinanced, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing and (z) if any Indebtedness or other obligation is secured by any Lien outstanding under any category of Permitted Liens measured by reference to a dollar amount, and is refinanced by any Indebtedness or other obligation secured by any Lien incurred by reference to such category of Permitted Liens, and such refinancing (or any subsequent refinancing) would cause such dollar amount to be exceeded, such dollar amount shall not be deemed to be exceeded (and such refinancing Lien shall be deemed permitted) so long as the principal amount of such refinancing Indebtedness or other obligation does not exceed an amount equal to the principal amount of such Indebtedness being refinanced, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing.

Permitted Payment”: as defined in Subsection 8.2(b).

Permitted Repricing Amendment”: as defined in Subsection 11.1(i).

Person”: an individual, partnership, corporation, company, limited liability company, business trust, trust, joint stock company, unincorporated organization, association, joint venture, Governmental Authority or other entity of whatever nature.

Plan”: at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA.

Platform”: Intralinks, SyndTrak Online, Debtdomain or any other similar electronic distribution system.

Plumb Acquisition Agreement”: the Purchase Agreement, dated as of June 4, 2017, as amended and restated pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of July 14, 2017, by and among Passthrough Holdings, Passthrough Mergersub, New Blocker, Blocker Mergersub, the Sellers, Waterworks Blocker, Waterworks Opco and HD Supply, Inc., as the same may be further amended, supplemented, waived or otherwise modified from time to time in accordance with this Agreement.

Preferred Stock”: as applied to the Capital Stock of any corporation or company, Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation or company, over Capital Stock of any other class of such corporation or company.

Prepayment Date”: as defined in Subsection 4.4(h).

 

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Pricing Grid”: with respect to Original Initial Term Loans:

 

Consolidated Total Leverage

Ratio

   Applicable Margin for ABR
Loans
  Applicable Margin for
Eurodollar Loans

Greater than or equal to 5.75 to 1.00

   2.00%   3.00%

Less than 5.75 to 1.00

   1.75%   2.75%

Projections”: those financial projections included in the confidential information memoranda and related material prepared in connection with the syndication of the Facilities and provided to the Lenders on or about July 12, 2017.

“Pubco”: Core & Main, Inc., a Delaware corporation, and any successor in interest thereto.

“Pubco IPO”: the Qualified IPO of Pubco relating to Pubco’s registration statement on Form S-1 (Registration No.  333-256382).

“Pubco IPO Transaction Proceeds”: the cash equity contributions to the Borrower on the First Amendment Effective Date from the proceeds of the Pubco IPO solely to the extent used to fund the Tranche B Effective Date Transactions.

“Pubco Merger Sub 1”: [Merger Sub 1], a Delaware [], and any successor in interest thereto.

“Pubco Merger Sub 2”: [Merger Sub 2], a Delaware [], and any successor in interest thereto.

“Pubco Merger Subs”: Pubco Merger Sub 1 and Pubco Merger Sub 2, collectively, and each individually, a “Pubco Merger Sub.”

“Pubco Merger Sub Mergers”: collectively, (i) the merger of Passthrough Holdings with and into WW Advisor, with WW Advisor being the survivor of such merger, (ii) the merger of Blocker Holdings with and into New Blocker, with New Blocker being the survivor of such merger, (iii) the merger of Pubco Merger Sub 1 with and into WW Advisor, with WW Advisor being the survivor of such merger and (iv) the merger of Pubco Merger Sub 2 with and into New Blocker, with New Blocker being the survivor of such merger.

“Pubco Mergers”: collectively, (i) the merger of WW Advisor with and into Pubco, with Pubco being the survivor of such merger and (ii) the merger of New Blocker with and into Pubco, with Pubco being the survivor of such merger.

“PTE”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

Purchase”: as defined in clause (4) of the definition of “Consolidated Coverage Ratio.”

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

 

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Qualified IPO”: the issuance or, sale or listing of common equity interests of the Borrower, any Parent Entity or IPO Vehicle in an underwritten public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (whether alone or, in connection with aan underwritten or secondary public offering or otherwise) and such equity interests are listed on a nationally-recognized stock exchange in the U.S.

Qualifying Lender”: as defined in Subsection 4.4(l)(iv)(3).

Rating Agency”: Moody’s or S&P or, if Moody’s or S&P or both shall not make a rating on the applicable security or instrument publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Borrower which shall be substituted for Moody’s or S&P or both, as the case may be.

Ratio Incremental Facility”: as defined in the definition of “Maximum Incremental Facilities Amount”.

Receivable”: a right to receive payment pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay, as determined in accordance with GAAP.

Recovery Event”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of the Borrower or any Restricted Subsidiary constituting Collateral giving rise to Net Available Cash to the Borrower or such Restricted Subsidiary, as the case may be, in excess of $25,000,000the greater of $50,000,000 and 3.50% of Consolidated Tangible Assets, to the extent that such settlement or payment does not constitute reimbursement or compensation for amounts previously paid by the Borrower or any Restricted Subsidiary in respect of such casualty or condemnation.

Reference Banks”: JPMorgan Chase Bank, N.A., Bank of America, N.A., Citibank, N.A., Barclays Bank PLC, Credit Suisse AG, Deutsche Bank AG New York Branch, Royal Bank of Canada, Goldman Sachs Bank USA, Natixis, New York Branch and Nomura Corporate Funding Americas, LLC.

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

Refinancing Agreement”: as defined in Subsection 8.3(c).

Refinancing Indebtedness”: Indebtedness that is Incurred to refinance Indebtedness (or unutilized commitments in respect of Indebtedness) Incurred pursuant to this Agreement and the Loan Documents, the Senior ABL Facility, the Senior Notes and any Indebtedness (or unutilized commitment in respect of Indebtedness) existing on the Closing Date

 

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and set forth on Schedule 8.1 or Incurred (or established) in compliance with this Agreement (including Indebtedness of the Borrower that refinances Indebtedness of(or unutilized commitments in respect of Indebtedness) of the Borrower or any Restricted Subsidiary (to the extent permitted in this Agreement) and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of the(or unutilized commitments in respect of Indebtedness) of the Borrower or another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness, and Indebtedness Incurred pursuant to a commitment that refinances any Indebtedness or unutilized commitment; provided that (1) if the Indebtedness being refinanced is Subordinated Obligations or Guarantor Subordinated Obligations, the Refinancing Indebtedness (x) has a final Stated Maturity at the time such Refinancing Indebtedness is Incurred that is equal tothe same as or greaterlater than the final Stated Maturity of the Indebtedness being refinanced (or, if shorterearlier, the Initial Term Loan Maturity Date), (y) has a weighted average life to maturity at the time such Refinancing Indebtedness is Incurred that is equal to or longer than the remaining weighted average life to maturity of the Indebtedness being refinanced (or, if shorter, the remaining weighted average life to maturity of the Initial Term Loans) (provided that any applicable Refinancing Indebtedness may have an earlier maturity date and/or shorter weighted average life to maturity (1) in the case of customary bridge financings, which, subject to customary conditions (as determined by the Borrower in good faith, which determination shall be conclusive), would either be automatically converted into or required to be exchanged for permanent financing which does not provide for such earlier maturity date or such shorter weighted average life to maturity, (2) pursuant to an escrow or similar arrangement with respect to the proceeds of such Refinancing Indebtedness or (3) if the aggregate principal amount of such applicable Refinancing Indebtedness at any time outstanding (together with the aggregate principal amount of any Additional Obligations and Indebtedness under any Incremental Term Loan Commitments, any Specified Refinancing Term Loan Facility and any applicable Extended Tranche, in each case outstanding under the Earlier Maturity Date Basket) does not exceed the Earlier Maturity Date Basket) and (z) if an Event of Default under Subsection 9.1(a) or (f) is continuing, is subordinated in right of payment to the Term Loan Facility Obligations to the same extent as the Indebtedness being refinanced, (2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or, if issued with original issue discount, with an aggregate issue price) that is equal to or less than the sum of (x) the aggregate principal amount then outstanding of the Indebtedness being refinanced, plus (y) an amount equal to any unutilized commitment relating to the Indebtedness being refinanced or otherwise then outstanding under the financing arrangement being refinanced to the extent the unutilized commitment being refinanced could be drawn in compliance with Subsection 8.1 immediately prior to such refinancing, plus (z) fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) Incurred or payable in connection with such refinancing, (3) Refinancing Indebtedness shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of the Borrower or a Subsidiary Guarantor that could not have been initially Incurred by such Restricted Subsidiary pursuant to Subsection 8.1 or (y) Indebtedness of the Borrower or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary, and (4) if the Indebtedness being refinanced constitutes Additional Obligations, Rollover Indebtedness, Permitted Debt Exchange Notes or Term Loan Facility Obligations Incurred pursuant to Subsection 8.1(b)(i)(II)(a) (or Refinancing Indebtedness in respect of the foregoing Indebtedness), (w) the Refinancing Indebtedness complies with the requirements of the definition of “Additional Obligations” (other than clause

 

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(ii) thereof), (x) if the Indebtedness being refinanced is unsecured and an Event of Default under Subsection 9.1(a) or (f) is continuing, the Refinancing Indebtedness is unsecured and (y) if the Indebtedness being refinanced is secured by a Lien on Term Loan Priority Collateral ranking junior to the Liens on Term Loan Priority Collateral securing the Term Loan Facility Obligations and an Event of Default under Subsection 9.1(a) or (f) is continuing, the Refinancing Indebtedness is unsecured or secured by a Lien on Term Loan Priority Collateral ranking junior to the Liens on Collateral securing the Term Loan Facility Obligations.

Refunding Capital Stock”: as defined in Subsection 8.2(b)(i).

Register”: as defined in Subsection 11.6(b)(iv).

“Regulated Bank”: (x) an Approved Commercial Bank that is (i) a U.S. depository institution the deposits of which are insured by the Federal Deposit Insurance Corporation; (ii) a corporation organized under Section 25A of the U.S. Federal Reserve Act of 1913; (iii) a branch, agency or commercial lending company of a foreign bank operating pursuant to approval by and under the supervision of the Board under 12 CFR part 211; (iv) a non-U.S. branch of a foreign bank managed and controlled by a U.S. branch referred to in clause (iii); or (v) any other U.S. or non-U.S. depository institution or any branch, agency or similar office thereof supervised by a bank regulatory authority in any jurisdiction or (y) any Affiliate of a Person set forth in clause (x) to the extent that (1) all of the Capital Stock of such Affiliate is directly or indirectly owned by either (I) such Person set forth in clause (x) or (II) a parent entity that also owns, directly or indirectly, all of the Capital Stock of such Person set forth in clause (x) and (2) such Affiliate is a securities broker or dealer registered with the SEC under Section 15 of the Exchange Act.

Regulation D”: Regulation D of the Board as in effect from time to time.

Regulation S-X”: Regulation S-X promulgated by the SEC as in effect on the Closing Date.

Regulation T”: Regulation T of the Board as in effect from time to time.

Regulation U”: Regulation U of the Board as in effect from time to time.

Regulation X”: Regulation X of the Board as in effect from time to time.

Reinvestment Period”: as defined in Subsection 8.4(b)(i).

Related Business”: those businesses in which the Borrower or any of its Subsidiaries is engaged on the Closing Date, or that are similar, related, complementary, incidental or ancillary thereto or extensions, developments or expansions thereof.

Related Parties”: with respect to any Person, such Person’s affiliatesAffiliates and the partners, officers, directors, trustees, employees, equity holders, shareholders, members, attorneys and other advisors, agents and controlling persons of such Person and of such Person’s affiliates and “Related Party” shall mean any of them.

 

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Related Taxes”: (x) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed by any government or other taxing authority on payments made by any Parent Entity or IPO Vehicle other than to another Parent Entity or IPO Vehicle), required to be paid by any Parent Entity or IPO Vehicle by virtue of its being incorporated or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Borrower, any of its Subsidiaries, or any Parent Entity or IPO Vehicle), or being a holding company parent of the Borrower, any of its Subsidiaries, or any Parent Entity or IPO Vehicle or receiving dividends from or other distributions in respect of the Capital Stock of the Borrower, any of its Subsidiaries, or any Parent Entity or IPO Vehicle, or having guaranteed any obligations of the Borrower or any Subsidiary thereof, or having received any payment in respect of any of the items for which the Borrower or any of its Subsidiaries is permitted to make payments to any Parent Entity or IPO Vehicle pursuant to Subsection 8.2, or acquiring, developing, maintaining, owning, prosecuting, protecting or defending its intellectual property and associated rights (including but not limited to receiving or paying royalties for the use thereof), or assertions of infringement, misappropriation, dilution or other violation of third-party intellectual property or associated rights, to the extent relating to the business or businesses of the Borrower or any Subsidiary thereof, (y) any taxes attributable to any taxable period (or portion thereof) ending on or prior to the Closing Date, or to the consummation of any of the Transactions or the Tranche B Effective Date Transactions, or to any Parent Entity’s or IPO Vehicle’s receipt of (or entitlement to) any payment in connection with the Transactions or the Tranche B Effective Date Transactions, including any payment received after the Closing Date pursuant to any agreement related to the Transactions or the Tranche B Effective Date Transactions or (z) any Tax Distributions; provided that at the election of the Borrower in connection with an initial public offering or other restructuring of the Borrower, Passthrough Holdings, Blocker Holdings, Management Holdings, any other or any Parent Entity or IPO Vehicle, this clause (z) shall instead mean any other federal, state, foreign, provincial or local taxes measured by income for which any Parent Entity or IPO Vehicle is liable up to an amount not to exceed, with respect to federal taxes, the amount of any such taxes that the Borrower and its Subsidiaries would have been required to pay on a separate company basis, or on a consolidated basis as if the Borrower had filed a consolidated return on behalf of an affiliated group (as defined in Section 1504 of the Code) of which it were the common parent, or with respect to state, foreign, provincial and local taxes, the amount of any such taxes that the Borrower and its Subsidiaries would have been required to pay on a separate company basis, or on a consolidated, combined, unitary or affiliated basis as if the Borrower had filed a consolidated, combined, unitary or affiliated return on behalf of an affiliated group (as defined in the applicable state, foreign, provincial or local tax laws for filing such return) consisting only of the Borrower and its Subsidiaries. Taxes include all interest, penalties and additions relating thereto.

“Reorganization Agreement”: the Reorganization Agreement, dated as of [], 2021, by and among Topco, Pubco, Management Holdings, Waterworks Holdings, certain CD&R Investors and other parties set forth in the preamble thereto, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

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Reportable Event”: any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30 day notice period is waived under Section 21, 22, 23, 24, 25, 27 or 28 of PBGC Regulation Section 4043 or any successor regulation thereto.

Repricing Transaction”: the prepayment, refinancing, substitution or replacement of all or a portion of the Initial Term Loans (including, without limitation, as may be effected through any amendment, waiver or modification to this Agreement relating to the interest rate for, or weighted average yield of, the Initial Term Loans), (a) if the primary purpose of such prepayment, refinancing, substitution, replacement, amendment, waiver or modification is (as reasonably determined by the Borrower in good faith, which determination shall be conclusive) to refinance the Initial Term Loans at a lower “effective yield” (taking into account, among other factors, margin, upfront or similar fees or original issue discount shared with all providers of such financing, but excluding the effect of any arrangement, commitment, underwriting, structuring, syndication or other fees payable in connection therewith that are not shared with all providers of such financing, and without taking into account any fluctuations in the Adjusted LIBOR Rate, but including any LIBOR floor or similar floor that is higher than the then applicable Adjusted LIBOR Rate), (b) if the prepayment, refinancing, substitution, replacement, amendment, waiver or modification is effectuated by the incurrence by the Borrower or any Restricted Subsidiary of new Indebtedness, such new Indebtedness is broadly marketed or syndicated first lien secured bank financing, and (c) if such prepayment, refinancing, substitution, replacement, amendment, waiver or modification results in first lien secured bank financing having an “effective yield” (as reasonably determined by the Administrative Agent, in consultation with the Borrower, consistent with generally accepted financial practices, after giving effect to, among other factors, margin, upfront or similar fees or original issue discount shared with all providers of such financing (calculated based on assumed four-year average life and without present value discount), but excluding the effect of any arrangement, commitment, underwriting, structuring, syndication or other fees payable in connection therewith that are not shared with all providers of such financing, and without taking into account any fluctuations in the Adjusted LIBOR Rate, but including any LIBOR floor or similar floor that is higher than the then applicable Adjusted LIBOR Rate) that is less than the “effective yield” (as reasonably determined by the Administrative Agent, in consultation with the Borrower, on the same basis) of the Initial Term Loans prior to being so prepaid, refinanced, substituted or replaced or subject to such amendment, waiver or modification to this Agreement.

Required Lenders”: Lenders the Term Credit Percentages of which aggregate to greater than 50.0%; provided that the Term Loans and unused Term Loan Commitments (if any) held or deemed held by Defaulting Lenders shall be excluded for purposes of making a determination of Required Lenders; provided further, that the Term Loans and unused Term Loan Commitments (if any) held or deemed held by a Disqualified Party shall be excluded for purposes of making a determination of Required Lenders.

Required Majority in Interest Lenders”: Lenders of any Tranche or Lenders of any group of affected Lenders, as applicable, the Total Credit Percentages of which aggregate to greater than 50.0% of the Total Credit Percentages of such Tranche or Lenders of such group of affected Lenders; provided that Incremental Revolving Commitments and Term Loans and unused Term Loan Commitments (if any) held or deemed held by Defaulting Lenders shall be

 

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excluded for purposes of making a determination of Required Majority in Interest Lenders; provided, further, that the Incremental Revolving Commitments and Term Loans and unused Term Loan Commitments (if any) held or deemed held by a Disqualified Party shall be excluded for purposes of making a determination of Required Majority in Interest Lenders.

Requirement of Law”: as to any Person, the Organizational Documents of such Person, and any law, statute, ordinance, code, decree, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property or to which such Person or any of its material property is subject, including laws, ordinances and regulations pertaining to zoning, occupancy and subdivision of real properties; provided that the foregoing shall not apply to any non-binding recommendation of any Governmental Authority.

“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

Responsible Officer”: as to any Person, any of the following officers of such Person: (a) the chief executive officer or the president of such Person and, with respect to financial matters, the chief financial officer, chief accounting officer, the treasurer or the controller of such Person, (b) any vice president of such Person or, with respect to financial matters, any assistant treasurer or assistant controller of such Person, in each case who has been designated in writing to the Administrative Agent or the Collateral Agent as a Responsible Officer by such chief executive officer or president of such Person or, with respect to financial matters, by such chief financial officer of such Person, (c) with respect to the fifth and sixth sentences of Subsection 1.2(c), Subsection 7.7 and ERISA matters and without limiting the foregoing, the general counsel (or substantial equivalent) of such Person, (d) with respect to any Person that does not have officers, the officer listed in clauses (a) through (c) of a Person that has the authority to act on behalf of such Person and (e) any other individual designated as a “Responsible Officer” for the purposes of this Agreement by the Board of Directors or equivalent body of such Person.

Restricted Payment”: as defined in Subsection 8.2(a).

Restricted Payment Transaction”: any Restricted Payment permitted pursuant to Subsection 8.2, any Permitted Payment, any Permitted Investment, or any transaction specifically excluded from the definition of the term “Restricted Payment” (including pursuant to the exception contained in clause (i) of such definition and the parenthetical exclusions contained in clauses (ii) and (iii) of such definition).

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

Revolving Lender”: any Incremental Revolving Lender.

Revolving Loans”: any Incremental Revolving Loans.

 

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Rollover Indebtedness”: Indebtedness of the Borrower or a Guarantor issued to any Lender in lieu of such Lender’s pro rata portion of any repayment of Term Loans made pursuant to Subsection 4.4(a) or (e); so long as (other than in connection with a refinancing in full of the Facilities) such Indebtedness would not have a weighted average life to maturity earlierthat is shorter than the remaining weighted average life to maturity of the Term Loans being repaid.

S&P”: Standard & Poor’s Financial Services LLC, a division of S&P Global, Inc., and its successors.

Sale”: as defined in clause (3) of the definition of “Consolidated Coverage Ratio.”

“Sanctions”: as defined in clause (c) of the first sentence of Subsection 5.21.

SEC”: the United States Securities and Exchange Commission or any successor thereto.

Secured Parties”: the “Secured Parties” as defined in the Guarantee and Collateral Agreement.

Securities Act”: the Securities Act of 1933, as amended from time to time.

Security Documents”: the collective reference to the Guarantee and Collateral Agreement and all other similar security documents hereafter delivered to the Collateral Agent granting or perfecting a Lien on any asset or assets of any Loan Party to secure the obligations and liabilities of the Loan Parties hereunder and/or under any of the other Loan Documents or to secure any guarantee by any Guarantor of any such obligations and liabilities, including any security documents executed and delivered or caused to be delivered to the Collateral Agent pursuant to Subsection 7.9(a), 7.9(b), 7.9(c) or 7.9(d), in each case, as amended, supplemented, waived or otherwise modified from time to time.

Sellers”: HD Supply Holdings, LLC, a Florida limited liability company, and HD Supply GP & Management, Inc., a Delaware corporation, and in each case any successor in interest thereto.

Senior ABL Agreement”: the ABL Credit Agreement, dated as of the date hereofClosing Date, as amended by Amendment No. 1, dated as of July 8, 2019, Amendment No. 2, dated as of May 4, 2020, and Amendment No. 3, dated as of the First Amendment Effective Date, among the Borrower, the subsidiary borrowers party thereto from time to time, the lenders party thereto from time to time and Citibank, N.A. (and/or one of its Affiliates), as administrative agent and collateral agent thereunder, as such agreement may be further amended, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased, decreased or extended from time to time (whether in whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior ABL Agreement or one or more other credit agreements or otherwise), except to the extent such agreement, instrument or document expressly provides that it is not intended to be and is not a Senior ABL Agreement. Any reference to the Senior ABL Agreement hereunder shall be deemed a reference to each Senior ABL Agreement then in existence.

 

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Senior ABL Facility”: the collective reference to the Senior ABL Agreement, any Loan Documents (as defined therein), any notes and letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent, trademark and copyright security agreement, mortgages, letter of credit applications and other guarantees, pledge agreements, security agreements and collateral documents, and other instruments and documents, executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased, decreased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior ABL Agreement or one or more other credit agreements, indentures (including the Senior Notes Indenture) or financing agreements or otherwise) except to the extent such agreement, instrument or document expressly provides that it is not intended to be and is not a Senior ABL Facility. Without limiting the generality of the foregoing, the term “Senior ABL Facility” shall include any agreement (i) changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, (ii) adding Subsidiaries of the Borrower as additional borrowers or guarantors thereunder, (iii) increasing or decreasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or (iv) otherwise altering the terms and conditions thereof.

“Senior Add-on Notes”: Additional 6.125% Senior Notes due 2025 of the Borrower issued on June 5, 2020, as the same may be exchanged for substantially similar senior notes that have been registered under the Securities Act, and as the same or such substantially similar notes may be amended, supplemented, waived or otherwise modified from time to time in accordance with this Agreement.

Senior Notes”: 6.125% Senior Notes due 2025 of the Borrower issued on the date hereofClosing Date, as the same may be exchanged for substantially similar senior notes that have been registered under the Securities Act, and as the same or such substantially similar notes may be amended, supplemented, waived or otherwise modified from time to time in accordance with this Agreement.

Senior Notes Documents”: the Senior Notes Indenture and all other instruments, agreements and other documents evidencing or governing the Senior Notes and the Senior Add-on Notes or providing for any guarantee, obligation, security or other right in respect thereof, as the same may be amended, supplemented, waived or otherwise modified from time to time.

Senior Notes Indenture”: the Indenture dated as of the date hereofClosing Date, under which the Senior Notes and the Senior Add-on Notes are issued, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with this Agreement.

Set”: the collective reference to Eurodollar Loans of a single Tranche, the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Eurodollar Loans shall originally have been made on the same day).

Settlement Service”: as defined in Subsection 11.6(b).

 

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Single Employer Plan”: any Plan which is covered by Title IV or Section 302 of ERISA or Section 412 of the Code, but which is not a Multiemployer Plan.

Solicited Discount Proration”: as defined in Subsection 4.4(l)(iv)(3).

Solicited Discounted Prepayment Amount”: as defined in Subsection 4.4(l)(iv)(1).

Solicited Discounted Prepayment Notice”: an irrevocable written notice of a Borrower Solicitation of Discounted Prepayment Offer made pursuant to Subsection 4.4(l)(iv) substantially in the form of Exhibit Q.

Solicited Discounted Prepayment Offer”: the irrevocable written offer by each Lender, substantially in the form of Exhibit R, submitted following the Administrative Agent’s receipt of a Solicited Discounted Prepayment Notice.

Solicited Discounted Prepayment Response Date”: as defined in Subsection 4.4(l)(iv)(1).

Solvent” and “Solvency”: with respect to the Borrower and its Subsidiaries on a consolidated basis after giving effect to the Transactions on the Closing Date means (i) the Fair Value and Present Fair Salable Value of the assets of the Borrower and its Subsidiaries taken as a whole exceed their Stated Liabilities and Identified Contingent Liabilities; (ii) the Borrower and its Subsidiaries taken as a whole do not have Unreasonably Small Capital; and (iii) the Borrower and its Subsidiaries taken as a whole will be able to pay their Stated Liabilities and Identified Contingent Liabilities as they mature (all capitalized terms used in this definition (other than “Borrower”, “Closing Date”, “Subsidiary” and “Transactions”, which have the meanings set forth in this Agreement) shall have the meaningmeanings assigned to such terms in the form of solvency certificate attached hereto as Exhibit H).

Special Purpose Entity”: (x) any Special Purpose Subsidiary or (y) any other Person that is engaged in the business of (i) acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code or any analogous law, as in effect in any applicable jurisdiction from time to time), other accounts and/or other receivables, and/or related assets, (ii) acquiring, selling, leasing, financing or refinancing Real Property and/or related rights (including under leases and insurance policies) and/or related assets (including managing, exercising and disposing of any such rights and/or assets) and/or (iiiii) financing or refinancing in respect of Capital Stock of any Special Purpose Subsidiary.

Special Purpose Financing”: any financing or refinancing of assets consisting of or including Receivables and/or Real Property of the Borrower or any Restricted Subsidiary that have been transferred to a Special Purpose Entity or made subject to a Lien in a Financing Disposition (including any financing or refinancing in respect of Capital Stock of a Special Purpose Subsidiary held by another Special Purpose Subsidiary).

 

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Special Purpose Financing Expense”: for any period, (a) the aggregate interest expense for such period on any Indebtedness of any Special Purpose Subsidiary that is a Restricted Subsidiary, which Indebtedness is not recourse to the Borrower or any Restricted Subsidiary that is not a Special Purpose Subsidiary (other than with respect to Special Purpose Financing Undertakings), and (b) Special Purpose Financing Fees.

Special Purpose Financing Fees”: distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Special Purpose Financing.

Special Purpose Financing Undertakings”: representations, warranties, covenants, indemnities, guarantees of performance and (subject to clause (y) of the proviso below) other agreements and undertakings entered into or provided by the Borrower or any of its Restricted Subsidiaries that the Borrower determines in good faith (which determination shall be conclusive) are customary or otherwise necessary or advisable in connection with a Special Purpose Financing or a Financing Disposition; provided that (x) it is understood that Special Purpose Financing Undertakings may consist of or include (i) reimbursement and other obligations in respect of notes, letters of credit, surety bonds and similar instruments provided for credit enhancement purposes, (ii) Hedging Obligations or other obligations relating to Interest Rate Agreements, Currency Agreements or Commodities Agreements entered into by the Borrower or any Restricted Subsidiary, in respect of any Special Purpose Financing or Financing Disposition, or (iii) any Guarantee in respect of customary recourse obligations (as determined in good faith by the Borrower, which determination shall be conclusive) in connection with any collateralized mortgage-backed securitization or any other Special Purpose Financing or Financing Disposition, including in respect of Liabilities in the event of any involuntary case commenced with the collusion of any Special Purpose Subsidiary or any Affiliate thereof, or any voluntary case commenced by any Special Purpose Subsidiary, under any applicable bankruptcy law, and (y) subject to the preceding clause (x), any such other agreements and undertakings shall not include any Guarantee of Indebtedness of a Special Purpose Subsidiary by the Borrower or a Restricted Subsidiary that is not a Special Purpose Subsidiary.

Special Purpose Subsidiary”: any Subsidiary of the Borrower that (a) is engaged solely in (x) the business of (i) acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code or any analogous law, as in effect in any applicable jurisdiction from time to time) and other accounts and receivables (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles), all proceeds thereof and all rights (contractual and other), collateral and other assets relating thereto, (ii) acquiring, selling, leasing, financing or refinancing Real Property and/or related rights (including under leases and insurance policies) and/or related assets (including managing, exercising and disposing of any such rights and/or assets), all proceeds thereof and all rights (contractual and other), collateral and/or other assets relating thereto, and/or (iiiii ) owning or holding Capital Stock of any Special Purpose Subsidiary and/or engaging in any financing or refinancing in respect thereof, and (y) any business or activities incidental or related to such business, and (b) is designated as a “Special Purpose Subsidiary” by the Borrower.

Specified Discount”: as defined in Subsection 4.4(l)(ii)(1).

Specified Discount Prepayment Amount”: as defined in Subsection 4.4(l)(ii)(1).

 

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Specified Discount Prepayment Notice”: an irrevocable written notice of the Borrower Offer of Specified Discount Prepayment made pursuant to Subsection 4.4(l)(ii) substantially in the form of Exhibit S.

Specified Discount Prepayment Response”: the written response by each Lender, substantially in the form of Exhibit T, to a Specified Discount Prepayment Notice.

Specified Discount Prepayment Response Date”: as defined in Subsection 4.4(l)(ii)(1).

Specified Discount Proration”: as defined in Subsection 4.4(l)(ii)(3).

Specified Existing Tranche”: as defined in Subsection 2.10(a)(ii).

Specified Refinancing Amendment”: an amendment to this Agreement effecting the incurrence of Specified Refinancing Facilities in accordance with Subsection 2.11.

Specified Refinancing Facilities”: as defined in Subsection 2.11(a).

Specified Refinancing Indebtedness”: Indebtedness incurred by the Borrower pursuant to and in accordance with Subsection 2.11.

Specified Refinancing Lenders”: as defined in Subsection 2.11(b).

Specified Refinancing Loans”: as defined in Subsection 2.11(a).

Specified Refinancing Term Loan Facilities”: as defined in Subsection 2.11(a).

Specified Refinancing Term Loans”: as defined in Subsection 2.11(a).

Specified Refinancing Tranche”: Specified Refinancing Facilities with the same terms and conditions made on the same day and any Supplemental Term Loan in respect thereof added to such Tranche pursuant to Subsection 2.8.

Specified Representations”: the representations set forth in (x) the last sentence of Subsection 5.2, (y) Subsections 5.3(a) (with respect to due organization and valid existence), 5.4 (other than the second sentence thereof), (to the extent the incurrence of the Loans, the provision of guarantees and granting of security would contravene the Organizational Documents of any Loan Party) 5.5(c), 5.11, 5.13 (subject to the limitations set forth in the proviso to Subsections 6.1(a), 6.1(g) and 6.1(h)), 5.21(a) and (to the extent the use of proceeds of the Loans on the Closing Date would violate OFAC) clause (c) of the first sentence of Subsection 5.21 and (z) the first sentence of Subsection 5.14.

Sponsor”: CD&R.

Stated Maturity”: with respect to any Indebtedness, the date specified in such Indebtedness as the fixed date on which the payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase or repayment of such Indebtedness at the option of the holder thereof upon the happening of any contingency).

 

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Statutory Reserves”: for any day as applied to a Eurodollar Loan, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the United States Federal Reserve System in New York City with deposits exceeding $1,000,000,000 against “Eurocurrency liabilities” (as such term is used in Regulation D). Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exceptions or offsets which may be available from time to time to any Lender under Regulation D.

Submitted Amount”: as defined in Subsection 4.4(l)(iii)(1).

Submitted Discount”: as defined in Subsection 4.4(l)(iii)(1).

Subordinated Obligations”: any Indebtedness of the Borrower (whether outstanding on the Closing Date or thereafter Incurred) that is expressly subordinated in right of payment to the Term Loan Facility Obligations pursuant to a written agreement.

Subsection 2.10 Additional Amendment”: as defined in Subsection 2.10(c).

Subsidiary”: as to any Person, a corporation, association, partnership, limited liability company or other entity (a) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned by such Person, or (b) the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person and, in the case of this clause (b), which is treated as a consolidated subsidiary for accounting purposes. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

Subsidiary Guarantor”: (x) each Domestic Subsidiary (other than any Excluded Subsidiary) of the Borrower which executes and delivers a Subsidiary Guaranty pursuant to Subsection 7.9 or otherwise, in each case, unless and until such time as the respective Subsidiary Guarantor (a) ceases to constitute a Domestic Subsidiary of the Borrower in accordance with the terms and provisions hereof, (b) is designated an Unrestricted Subsidiary pursuant to the terms of this Agreement or (c) is released from all of its obligations under the Subsidiary Guaranty in accordance with the terms and provisions thereof and (y) each other Subsidiary of the Borrower which the Borrower causes to execute and deliver a Subsidiary Guaranty pursuant to the last sentence of Subsection 7.9(b) or otherwise, in each case, unless and until such time as the respective Subsidiary Guarantor (a) ceases to constitute a Domestic Subsidiary of the Borrower in accordance with the terms and provisions hereof, (b) is designated an Unrestricted Subsidiary pursuant to the terms of this Agreement or (c) is released from all of its obligations under the Subsidiary Guaranty in accordance with the terms and provisions thereof.

 

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Subsidiary Guaranty”: the guaranty of the Term Loan Facility Obligations of the Borrower under the Loan Documents provided pursuant to the Guarantee and Collateral Agreement or pursuant to a guaranty in such other form as may be agreed between the Borrower and the Administrative Agent.

Successor Borrower”: as defined in Subsection 8.7(a)(i).

Supplemental Term Loan Commitments”: as defined in Subsection 2.8(a).

Supplemental Term Loans”: Term Loans made in respect of Supplemental Term Loan Commitments.

Supply Agreement”: the Supply Agreement, dated as of the date hereofClosing Date, by and between the Borrower and HD Supply Facilities Maintenance, Ltd. d/b/a USABlueBook, as the same may be amended, supplemented, waived or otherwise modified from time to time.

Tax Distributions”: tax distributions to members of the Borrower pursuant to the Borrower Partnership Agreement.

Tax Sharing Agreement”: theany Tax Sharing Agreement between the Borrower and any Parent Entity or IPO Vehicle to be entered into at the election of the Borrower in connection with an initial public offering or other restructuring of the Borrower, Passthrough Holdings, Blocker Holdings, Management HoldingsTopco, Midco, Intermediate GP, any other Parent Entity or any IPO Vehicle, on or prior to such initial public offering or other restructuring that (i) in the case of a Tax Sharing Agreement providing for the sharing of taxes in respect of a consolidated, combined, unitary or affiliated tax group, is substantially in the form of Exhibit V and (ii) in the case of a Tax Sharing Agreement that is a tax receivables agreement providing for the payment of certain incremental tax savings arising to the Borrower, any Parent Entity or IPO Vehicle in connection with (x) the implementation of such initial public offering or other restructuring through the use of an “Up-C” structure or (y) the use of net operating losses or other tax attributes of any Parent Entity, IPO Vehicle, the Borrower or any of its Subsidiaries generated prior to such initial public offering or other restructuring, and is on customary market terms for such agreements, in either case of clause (i) or (ii), as the same may be amended from time to time in accordance with the terms thereof and hereof.

Taxes”: any and all present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority.

Temporary Cash Investments”: any of the following: (i) any investment in (x) direct obligations of the United States of America, Canada, the United Kingdom, Switzerland, a member state of the European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Borrower or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any thereof, or obligations Guaranteed by the United States of America, Canada, the United Kingdom, Switzerland or a member state of the European Union or any country in whose currency funds are being held pending their application in the making of an

 

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investment or capital expenditure by the Borrower or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any of the foregoing, or obligations guaranteed by any of the foregoing or (y) direct obligations of any foreign country recognized by the United States of America rated at least “A” by S&P or “A-1A2 ” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (ii) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers’ acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by (x) any bank or other institutional lender under this Agreement or any Senior ABL Facility or any affiliate thereof or (y) a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital and surplus aggregating in excess of $250,000,000 (or the foreign currency equivalent thereof) and whose long term debt is rated at least “A” by S&P or “A-1A2 ” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization) at the time such Investment is made, (iii) repurchase obligations for underlying securities or instruments of the types described in clause (i) or (ii) above entered into with a bank meeting the qualifications described in clause (ii) above, (iv) Investments in commercial paper, maturing not more than 24 months after the date of acquisition, issued by a Person (other than that of the Borrower or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (v) Investments in securities maturing not more than 24 months after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “BBB-” by S&P or “Baa3” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (vi) Indebtedness or Preferred Stock (other than of the Borrower or any of its Subsidiaries) having a rating of “A” or higher by S&P or “A2” or higher by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (vii) investment funds investing at least 90.0% of their assets in securities of the type described in clauses (i) through (vi) above (which funds may also hold cash pending investment and/or distribution), (viii) any money market deposit accounts issued or offered by a domestic commercial bank or a commercial bank organized and located in a country recognized by the United States of America, in each case, having capital and surplus in excess of $250,000,000 (or the foreign currency equivalent thereof), or investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of 1940, as amended and (ix) similar investments approved by the Board of Directors in the ordinary course of business.

Term Credit Percentage”: as to any Lender at any time, the percentage of the aggregate outstanding Term Loans (if any) of the Lenders and aggregate unused Term Loan Commitments of the Lenders (if any) then constituted by such Lender’s outstanding Term Loans (if any) and such Lender’s unused Term Loan Commitments (if any).

 

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Term Loan Commitment”: as to any Lender, the aggregate of its Initial Term Loan Commitments, Incremental Term Loan Commitment and Supplemental Term Loan Commitments; collectively as to all Lenders the “Term Loan Commitments.”

Term Loan Declined Amount”: as defined in Subsection 4.4(h).

Term Loan Facility Obligations”: obligations of the Borrower and the other Loan Parties from time to time arising under or in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during (or that would accrue but for) the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Borrower and the other Loan Parties under this Agreement and the other Loan Documents.

Term Loan Priority Collateral”: as defined in the ABL/Term Loan Intercreditor Agreement, whether or not the same remains in full force and effect.

Term Loans”: the Initial Term Loans, Incremental Term Loans, Extended Term Loans and Specified Refinancing Term Loans, as the context shall require.

“Topco”: Core & Main Holdings, LP, a Delaware limited partnership, and any successor in interest thereto.

“Topco PIK Notes”: 8.625%/9.375% Senior PIK Toggle Notes due 2024 of Topco issued on September 16, 2019, as the same may be exchanged for substantially similar senior PIK toggle notes that have been registered under the Securities Act, and as the same or such substantially similar notes may be amended, supplemented, waived or otherwise modified from time to time.

Total Credit Percentage”: as to any Lender at any time, the percentage which (a) the sum of (i) such Lender’s Incremental Revolving Commitment (if any) then outstanding (or, if the Incremental Revolving Commitments have terminated or expired, such Lender’s then outstanding Revolving Loans) and (ii) such Lender’s then outstanding Term Loans (if any) and such Lender’s unused Term Loan Commitments (if any) then outstanding constitutes of (b) the sum of (i) the Incremental Revolving Commitments (if any) of all Lenders then outstanding (or, if the Incremental Revolving Commitments have terminated or expired, such Lender’s then outstanding Revolving Loans) and (ii) the aggregate outstanding Term Loans (if any) of all Lenders then outstanding and aggregate unused Term Loan Commitments of all Lenders (if any) then outstanding.

Trade Payables”: with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services.

 

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Trading Price”: as defined in Subsection 11.6(m)(iv)(A)(3)(z).

Tranche”: (i) with respect to Term Loans or commitments, refers to whether such Term Loans or commitments are (1Original Initial Term Loans or Original Initial Term Loan Commitments, (2Tranche B Term Loans or Tranche B Term Loan Commitments, (3) Incremental Loans or Incremental Term Loan Commitments with the same terms and conditions made on the same day and any Supplemental Term Loans added to such Tranche pursuant to Subsection 2.8, (34 ) Extended Term Loans (of the same Extension Series) or (45) Specified Refinancing Term Loan Facilities with the same terms and conditions made on the same day and any Supplemental Term Loans added to such Tranche pursuant to Subsection 2.8 (excluding Tranche B Term Loans and Tranche B Term Loan Commitments) and (ii) with respect to Revolving Loans or commitments, refers to whether such Revolving Loans or commitments are Incremental Revolving Commitments or Incremental Revolving Loans with the same terms and conditions made on the same day pursuant to Subsection 2.8.

“Tranche B Effective Date Transactions”: collectively, any or all of the following (whether taking place prior to, on or following the First Amendment Effective Date): (i) the entry into the Reorganization Agreement and the Exchange Agreement and the consummation of the transactions contemplated thereby[, including those transactions described under the caption “The Reorganization Transactions” in the prospectus, dated [], 2021, relating to Pubco’s registration statement on Form S-1 (Registration No. 333-256382) in the form filed with the SEC pursuant to Rule 424(b) under the Securities Act (including the Pubco Merger Sub Mergers and the Pubco Mergers)], (ii) the Pubco IPO, resulting in Pubco issuing certain equity interests of Pubco being listed on a nationally recognized stock exchange in the U.S., (iii) the entry into the First Amendment and Incurrence of Tranche B Term Loans (including via an exchange of the Original Initial Term Loans for Tranche B Term Loans) thereunder, (iv) the entry into Amendment No. 3 to the Senior ABL Facility and any Incurrence of Indebtedness thereunder on the First Amendment Effective Date, (v) the repayment of the Original Initial Term Loans held by the Non-Exchanging Term Lenders or exchange by the Exchanging Term Lenders of the Original Initial Term Loans through a cashless rollover pursuant to Subsection 4.4(g), (vi) the repayment of the Senior Notes, the Senior Add-on Notes and the Topco PIK Notes, and (vii) all other transactions relating to any of the foregoing (including payment of fees, premiums and expenses related to any of the foregoing).

“Tranche B Installment Date”: as defined in Subsection 2.2(b)(ii).

“Tranche B Term Lender”: any Lender having a Tranche B Term Loan Commitment and/or a Tranche B Term Loan outstanding hereunder.

“Tranche B Term Loan”: as defined in Subsection 2.1(b)(i).

“Tranche B Term Loan Commitment”: as to any Lender, its obligation to make Tranche B Term Loans to the Borrower pursuant to Subsection 2.1(b) in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A-1 under the heading “Tranche B Term Loan Commitment” or, in the case of any Lender that is an Assignee, the amount of the assigning Lender’s Tranche B Term Loan Commitment assigned to such Assignee pursuant to Subsection 11.6(b) (in each case as such

 

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amount may be adjusted from time to time as provided herein); collectively, as to all the Lenders, the “Tranche B Term Loan Commitments”. The original aggregate amount of the Tranche B Term Loan Commitments on the First Amendment Effective Date, immediately after giving effect to the First Amendment, is $1,500,000,000.

“Tranche B Term Loan Maturity Date”: [], 2028.1

Transaction Agreements”: collectively, (i) the Plumb Acquisition Agreement, (ii) the CD&R Indemnification Agreement, (iii) the CD&R Consulting Agreement, (iv) the Transition Services Agreement, (v) the Supply Agreement, and (vi) the Reorganization Agreement, (vii) the Exchange Agreement and (viii) any agreement primarily providing for indemnification and/or contribution for the benefit of any Permitted Holder in respect of Liabilities resulting from, arising out of or in connection with, based upon or relating to (a) any management, consulting or advisory services, or any financing, underwriting or placement services or other investment banking activities to, for or in respect of any Parent Entity or any of its Subsidiaries, (b) any offering of securities or other financing activity or arrangement of or by any Parent Entity or any of its Subsidiaries or (c) any action or failure to act of or by any Parent Entity or any of its Subsidiaries (or any of their respective predecessors), in each case as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof.

Transactions”: collectively, any or all of the following (whether taking place prior to, on or following the date hereofClosing Date): (i) the entry into the Plumb Acquisition Agreement and the consummation of the transactions contemplated thereby, including (a) the Waterworks Merger, whereby (1) a portion of the proceeds of the transaction financing shall be distributed pro rata to interest holders in Waterworks Opco including the Sellers and Waterworks Blocker and (2) immediately following such distribution, Passthrough Holdings purchases the Sellers’ direct interests in Waterworks Opco, (b) the Blocker Merger and (c) the subsequent acquisition by the Borrower from Affiliates of the Sellers of certain assets related to the Waterworks Business, (ii) the conversion of Blocker Holdings into a Delaware limited liability company following the Blocker Merger, (iii) the contribution of Blocker Holdings to Blocker Aggregator following the conversion described in the preceding clause (ii) of this definition, (iv) the entry into the Senior Notes Documents, and the offer and issuance of the Senior Notes, (v) the entry into this Agreement and the other Loan Documents and Incurrence of Indebtedness hereunder, (vi) the entry into the ABL Facility Documents and any Incurrence of Indebtedness thereunder on the date hereofClosing Date, (vii) the Equity Contribution and (viii) all other transactions relating to any of the foregoing (including payment of fees and expenses related to any of the foregoing).

Transferee”: any Participant or Assignee.

Transition Services Agreement”: the Transition Services Agreement, to be dated as of the date hereofClosing Date, by and between the Borrower, on behalf of itself and certain of its Affiliates, and HD Supply, Inc., a Delaware corporation (and any successors in interest thereto), on behalf of itself and certain of its subsidiaries, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

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NTD. To be seven years after the First Amendment Effective Date.

 

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Treasury Capital Stock”: as defined in Subsection 8.2(b)(i).

Type”: the type of Loan determined based on the interest option applicable thereto, with there being two Types of Loans hereunder, namely ABR Loans and Eurodollar Loans.

UCC”: the Uniform Commercial Code as in effect in the State of New York from time to time.

“UK Financial Institution”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

United States Person”: any United States person within the meaning of Section 7701(a)(30) of the Code.

Unrestricted Cash”: at any date of determination, without duplication, (a) the aggregate amount of cash, Cash Equivalents and Temporary Cash Investments included in the cash accounts that would be listed on the consolidated balance sheet of the Borrower prepared in accordance with GAAP as of the end of the most recent four consecutiverecently ended Fiscal QuartersMonth of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) ending prior to the date of such determination for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available to the extent such cash is not classified as “restricted” for financial statement purposes (unless so classified solely because of any provision under the Loan Documents, the ABL Facility Documents or any other agreement or instrument governing other Indebtedness that is subject to the ABL/Term Loan Intercreditor Agreement, a Junior Lien Intercreditor Agreement or any Other Intercreditor Agreement governing the application thereof or because they are subject to a Lien securing the Term Loan Facility Obligations, Obligations under the ABL Facility Documents or other Indebtedness that is subject to the ABL/Term Loan Intercreditor Agreement, a Junior Lien Intercreditor Agreement or any Other Intercreditor Agreement), plus (bcash, Cash Equivalents and Temporary Cash Investments from the proceeds of any capital contribution to the Borrower or from the issuance or sale of its Capital Stock or from any Incurrence of Indebtedness in reliance on the Ratio Incremental Facility or any other Indebtedness which is secured by Liens pursuant to clause (s) of the definition of “Permitted Liens” since the date of such consolidated balance sheetsince the end of such Fiscal Month and on or prior to the date of determination (that, in the case of Indebtedness, are (in the

 

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good faith judgment ofby the Borrower, which determination shall be conclusive), intended to be used for working capital purposes.), plus (c) cash, Cash Equivalents and Temporary Cash Investments that cash collateralize letters of credit issued on behalf of the Borrower or any of its Restricted Subsidiaries, including the proceeds of any Indebtedness being borrowed at the time of determination.

Unrestricted Subsidiary”: (i) any Subsidiary of the Borrower that at the time of determination is an Unrestricted Subsidiary, as designated by the Board of Directors in the manner provided below, and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Borrower (including any newly acquired or newly formed Subsidiary of the Borrower) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Borrower or any other Restricted Subsidiary of the Borrower that is not a Subsidiary of the Subsidiary to be so designated; provided, that (A) such designation was made at or prior to the Closing Date, or (B) the Subsidiary to be so designated has total consolidated assets of $1,000 or less or (C) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Subsection 8.2 and (D) immediately after such designation, no Event of Default under Subsection 9.1(a) or (f) shall have occurred and be continuing. The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, that immediately after giving effect to such designation (1)  (xw) the Borrower could Incur at least $1.00 of additional Indebtedness under Subsection 8.1(a) or (ySubsection 8.1(b)(xvii) or (x) the Consolidated Coverage Ratio would be equal to or greater than it wasor exceed the Consolidated Coverage Ratio immediately prior to giving effect to such designation or (y) the Consolidated Total Leverage Ratio would be equal or be less than the Consolidated Total Leverage Ratio immediately prior to giving effect to such designation or (z) such Subsidiary shall be a Special Purpose Subsidiary with no Indebtedness outstanding other than Indebtedness that can be Incurred (and upon such designation shall be deemed to be Incurred and outstanding) pursuant to Subsection 8.1(b) and (2) immediately after such designation, no Event of Default under Subsection 9.1(a) or (f) shall have occurred and be continuing. Any such designation by the Board of Directors shall be evidenced to the Administrative Agent by promptly filing with the Administrative Agent a copy of the resolution of the Borrower’s Board of Directors giving effect to such designation and a certificate of a Responsible Officer of the Borrower certifying that such designation complied with the foregoing provisions.

“U.S. Special Resolution Regime”: each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

U.S. Tax Compliance Certificate”: as defined in Subsection 4.11(b)(ii)(2).

Voting Stock”: as to any entity, all classes of Capital Stock of such entity then outstanding and normally entitled to vote in the election of directors or all interests in such entity with the ability to control the management or actions of such entity.

 

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Waterworks Acquisition”: the acquisition by Passthrough Holdings and New Blocker on the Closing Date, in accordance with the Plumb Acquisition Agreement, from the Sellers and Affiliates thereof of the Waterworks Business by means of (i) the Waterworks Merger, (ii) the Blocker Merger and (iii) the subsequent acquisition by the Borrower from Affiliates of the Sellers of certain assets related to the Waterworks Business.

Waterworks Blocker”: HD Supply Waterworks Group, Inc., a Delaware corporation, and any successor in interest thereto.

Waterworks Business”: the operations reflected in the financial statements delivered pursuant to Subsection 6.1(d), including the distribution of complete lines of water and wastewater transmission products, serving contractors and municipalities in the water and wastewater industries for residential and non-residential uses, in the following markets: non-residential, residential, water systems and sewage systems, to the extent operated by the Acquired Companies and its Affiliates; provided, that, “Waterworks Business” does not include any (a) assets or operations of the “USA Blue Book” business of Sellers’ Affiliates or (b) corporate level services.

“Waterworks Holdings”: CD&R Waterworks Holdings, L.P., a Cayman Islands exempted limited partnership, and any successor in interest thereto

Waterworks Merger”: the merger of Passthrough Mergersub with and into Waterworks Opco, with Waterworks Opco being the survivor of such merger.

Waterworks Opco”: HD Supply Waterworks, Ltd., a Florida limited partnership, and any successor in interest thereto. As of the First Amendment Effective Date, Waterworks Opco is Core & Main LP, a Florida limited partnership.

Wholly Owned Domestic Subsidiary”: as to any Person, any Domestic Subsidiary of such Person of which such Person owns, directly or indirectly through one or more Wholly Owned Subsidiaries, all of the Capital Stock of such Domestic Subsidiary other than directors qualifying shares or shares held by nominees.

Wholly Owned Subsidiary”: as to any Person, any Subsidiary of such Person of which such Person owns, directly or indirectly through one or more Wholly Owned Subsidiaries, all of the Capital Stock of such Subsidiary other than directors qualifying shares or shares held by nominees.

Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule., and (b) with respect to the United Kingdom, the powers of the applicable Resolution Authority in each case under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

 

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“WW Advisor”: CD&R WW Advisor, LLC, Delaware limited liability company, and any successor in interest thereto.

1.2 Other Definitional and Interpretive Provisions.

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any Notes, any other Loan Document or any certificate or other document made or delivered pursuant hereto.

(b) As used herein and in any Notes and any other Loan Document, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Borrower and its Restricted Subsidiaries not defined in Subsection 1.1 and accounting terms partly defined in Subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” Any reference herein to any Person shall be construed to include such Person’s successors and assigns permitted hereunder. With respect to any Default or Event of Default, the words “exists,” “is continuing” or similar expressions with respect thereto shall mean that such Default or Event of Default has occurred and has not yet been cured or waived. If any Default or Event of Default has occurred hereunder (any such Default or Event of Default, an “Initial Default”) and is subsequently cured (a “Cured Default”), any other Default or, Event of Default thator failure of a condition precedent that resulted or may have resulted from (i) the making or deemed making of any representation or warranty by any Loan Party or (iithe taking of any actionact or omission by any Loan Party or any Subsidiary of any Loan Party that was prohibited hereunder solely as a result of the continuation of such Cured Default (and was not otherwise prohibited by this Agreement), in each case which subsequent Default or, Event of Default or failure would not have arisen had the Cured Default not been continuing at the time of such representation, warranty or, action or omission, shall be deemed to automatically be cured or satisfied, as applicable, upon, and simultaneously with, the cure of the Cured Default, so long as at the time of such representation, warranty or, action or omission, no Responsible Officer of the Borrower had knowledge of any such Initial Default. To the extent not already so notified, the Borrower will provide prompt written notice of any such automatic cure to the Administrative Agent after a Responsible Officer of the Borrower knows of the occurrence of any such automatic cure. Any time period in this Agreement to cure any actual or alleged Default or Event of Default may be extended or stayed by a court of competent jurisdiction to the extent such actual or alleged Default or Event of Default is the subject of litigation.

 

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(d) For purposes of determining any financial ratio or making any financial calculation for any fiscal quarter (or portion thereof) ending prior to the Closing Date, the components of such financial ratio or financial calculation shall be determined on a pro forma basis to give effect to the Transactions as if they had occurred at the beginning of such four-quarter period; and each Person that is a Restricted Subsidiary upon giving effect to the Transactions shall be deemed to be a Restricted Subsidiary for purposes of the components of such financial ratio or financial calculation as of the beginning of such four-quarter period.

(e) For purposes of this Agreement for periods ending on or prior to the Closing Date, references to the consolidated financial statements of the Borrower (or any Parent Entity or IPO Vehicle) shall be to the combined financial statements of the Waterworks Business, with pro forma effect being given to the Transactions (with Subsidiaries of the Waterworks Business that are Subsidiaries of the Borrower after giving effect to the Transactions being deemed Subsidiaries of the Borrower), as the context may require, provided that nothing in this clause (e) shall require the delivery of combined or consolidated financial statements or other similar materials for or with respect to the Waterworks Business, except as otherwise specifically required by this Agreement.

(f) Any financial ratios required to be maintained pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (rounding up if there is no nearest number).

(g) Any references in this Agreement to “cash and/or Cash Equivalents”, “cash, Cash Equivalents and/or Temporary Cash Investments” or any similar combination of the foregoing shall be construed as not double counting cash or any other applicable amount which would otherwise be duplicated therein.

(h) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(i) In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of determining compliance with any provision of this Agreement which requires that no Default, Event of Default or specified Default or Event of Default, as applicable, has occurred, is continuing or would result from any such action, as applicable, such condition shall, at the option of the Borrower, be deemed satisfied, so long as no Default, Event of Default or specified Default or Event of Default, as applicable, exists on the date (x) a definitive agreement for such Limited Condition Transaction is entered into, (y) in connection with an acquisition to which the United Kingdom City Code on Takeovers and Mergers (or any comparableequivalent thereof under the laws, rules or regulations in any other applicable jurisdiction) applies, the date on which a “Rule 2.7 announcement” of a firm intention to make an offer in respect of a target of a Limited Condition Transaction is made (or the equivalent notice under such comparableequivalent laws, rules or regulations in such other applicable jurisdiction) or (zirrevocable notice of redemption, repurchase, defeasance, satisfaction and discharge or repayment of Indebtedness, Disqualified Stock or Preferred Stock is given. For the

 

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avoidance of doubt, if the Borrower has exercised its option under the first sentence of this clause (i), and any Default, Event of Default or specified Default or Event of Default, as applicable, occurs following the date (x) a definitive agreement for the applicable Limited Condition Transaction was entered into, (y) in connection with an acquisition to which the United Kingdom City Code on Takeovers and Mergers (or any comparableequivalent thereof under the laws, rules or regulations in any other applicable jurisdiction) applies, the date on which a “Rule 2.7 announcement” of a firm intention to make an offer in respect of a target of a Limited Condition Transaction is made (or the equivalent notice under such comparableequivalent laws, rules or regulations in such other applicable jurisdiction) or (zirrevocable notice of redemption, repurchase, defeasance, satisfaction and discharge or repayment of Indebtedness, Disqualified Stock or Preferred Stock is given and prior to the consummation of such Limited Condition Transaction, any such Default, Event of Default or specified Default or Event of Default, as applicable, shall be deemed to not have occurred or be continuing for purposes of determining whether any action being taken in connection with such Limited Condition Transaction is permitted hereunder.

(j) In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of:

(i) determining compliance with any provision of this Agreement which requires the calculation of the Consolidated Coverage Ratio, the Consolidated Secured Leverage Ratio or the Consolidated Total Leverage Ratio or any other financial measure;

(ii) testing baskets set forth in this Agreement (including baskets measured as a percentage of Consolidated Tangible Assets or Four Quarter Consolidated EBITDA); or

(iii) any other determination as to whether any such Limited Condition Transaction and any related transactions (including any financing thereof) complies with the covenants or agreements contained in this Agreement;

in each case, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted hereunder, shall be deemed to be the date (x) a definitive agreement for such Limited Condition Transaction is entered into, (y) in connection with an acquisition to which the United Kingdom City Code on Takeovers and Mergers (or any comparableequivalent thereof under the laws, rules or regulations in any other applicable jurisdiction) applies, the date on which a “Rule 2.7 announcement” of a firm intention to make an offer in respect of a target of a Limited Condition Transaction is made (or the equivalent notice under such comparableequivalent laws, rules or regulations in such other applicable jurisdiction) or (zirrevocable notice of redemption, repurchase, defeasance, satisfaction and discharge or repayment of Indebtedness, Disqualified Stock or Preferred Stock is given, as applicable (the “LCT Test Date”), and if, after giving pro forma effect to the Limited Condition Transaction and the other transactions to be entered into in connection

 

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therewith (including any Incurrence or Discharge of Indebtedness and Liens and the use of proceeds thereof) as if they had occurred at the beginning of the most recent four consecutive Fiscal Quarters of the Borrower ending prior to the LCT Test Date for which consolidated financial statements of the Borrower (or, any Parent Entity or IPO Vehicle whose financial statements satisfy the Borrower’s reporting obligations under Subsection 7.1) are available, the Borrower could have taken such action on the relevant LCT Test Date in compliance with such ratio, basket or amount, such ratio, basket or amount shall be deemed to have been complied with; provided, that (a) if financial statements for one or more subsequent Fiscal Quarters or Fiscal Years shall have been delivered pursuant to Subsection 7.1(a) or 7.1(b), the Borrower may elect, in its sole discretion, to re-determine all such ratios, baskets or amounts on the basis of such financial statements, in which case, such date of redetermination shall thereafter be deemed to be the applicable LCT Test Date for purposes of such ratios, baskets or amounts and (b) except as contemplated in the foregoing clause (a), compliance with such ratios, baskets or amounts (and any related requirements and conditions) shall not be determined or tested at any time after the applicable LCT Test Date for such Limited Condition Transaction and any actions or transactions related thereto (including any Incurrence or Discharge of Indebtedness and Liens and the use of proceeds thereof). For purposes of determining compliance with any ratio, basket or amount on the applicable LCT Test Date, Consolidated Interest Expense for purposes of the Consolidated Coverage Ratio will be calculated using an assumed interest rate based on the indicative interest margin contained in any financing commitment documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as determined by the Borrower in good faith, which determination shall be conclusive. For the avoidance of doubt, if the Borrower has made an LCT Election and any of the ratios, baskets or amounts for which compliance was determined or tested as of the LCT Test Date are exceeded as a result of fluctuations in any such ratio, basket or amount, including due to fluctuations in exchange rates or in Consolidated EBITDA or Consolidated Tangible Assets of the Borrower or the Person subject to such Limited Condition Transaction or any applicable currency exchange rate, at or prior to the consummation of the relevant transaction or action, such ratios, baskets or amounts will not be deemed to have been exceeded as a result of such fluctuations. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, basket or amount with respect to the Incurrence or Discharge of Indebtedness or Liens, or the making of Restricted Payments, Asset Dispositions, mergers, the conveyance, lease or other transfer of all or substantially all of the assets of the Borrower or the designation of an Unrestricted Subsidiary on or following the relevant LCT Test Date and prior to the earlier of the date on which (1) such Limited Condition Transaction is consummated or, (2) the definitive agreement for, or firm offer in respect of, such Limited Condition Transaction (if an acquisition or investment) is terminated or expires without consummation of such Limited Condition Transaction or (3) such notice of redemption, repurchase, defeasance, satisfaction and discharge or repayment of Indebtedness, Disqualified Stock or Preferred Stock is revoked or expires without consummation, any such ratio, basket or amount shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any Incurrence or Discharge of Indebtedness and Liens and the use of proceeds thereof) have been consummated.

 

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(k) Any reference herein or in any other Loan Document to (i) a transfer, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company or a limited partnership, as applicable, or an allocation of assets to a series of a limited liability company (collectively, a “Division”), as if it were a transfer, assignment, sale or transfer, or similar term, as applicable, to a separate Person, and (ii) a merger, consolidation, amalgamation or consolidation, or similar term, shall be deemed to apply to the division of or by a limited liability company, or an allocation of assets to a series of a limited liability company, or the unwinding of such a division or allocation, as if it were a merger, consolidation, amalgamation or consolidation or similar term, as applicable, with a separate Person.

SECTION 2

Amount and Terms of Commitments

2.1 Initial Term Loans. (a) Subject to the terms and conditions hereof, each Lender holding an Original Initial Term Loan Commitment severally agrees to make, in Dollars, in a single draw on the Closing Date, one or more term loans (each, an “Original Initial Term Loan”) to the Borrower in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name in Schedule A under the heading “Original Initial Term Loan Commitment”, as such amount may be adjusted or reduced pursuant to the terms hereof, which Original Initial Term Loans:

(i) except as hereinafter provided, shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, ABR Loans or Eurodollar Loans; and

(ii) shall be made by each such Lender in an aggregate principal amount which does not exceed the Original Initial Term Loan Commitment of such Lender.

Without limitation of Subsections 2.8 and 8.1(b)(i), once repaid, Original Initial Term Loans incurred hereunder may not be reborrowed. On the Closing Date (after giving effect to the incurrence of Original Initial Term Loans on such date), the Original Initial Term Loan Commitments of each Lender shall terminate.

(b)

(i) Subject to the terms and conditions hereof, each Lender listed on Schedule A-1 under the heading “Tranche B Term Loan Commitment” attached hereto (the “New Tranche B Term Lenders”) severally agrees to make, in Dollars, in a single draw on the First Amendment Effective Date, one or more term loans (each, a “New Tranche B Term Loan” and, collectively with the term loans representing the Original Initial Term Loans exchanged by the Existing Term Lenders by exercising a cashless rollover pursuant to Subsection 4.4(g), the “Tranche B Term Loans”) to the Borrower in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name in Schedule A-1 under the heading “Tranche B Term Loan Commitment”, as such amount

 

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may be adjusted or reduced pursuant to the terms hereof; provided that Exchanging Term Lenders shall make their respective Tranche B Term Loans by exchanging their Original Initial Term Loans for Tranche B Term Loans constituting Rollover Indebtedness in lieu of their pro rata portion of the prepayment of Original Initial Term Loans pursuant to Subsection 4.4(g).

(ii) Subject to the terms and conditions hereof, on the First Amendment Effective Date, upon execution of the First Amendment by an Existing Term Lender and the indication on such Lender’s signature page that such Existing Term Lender elects to exchange, through a cashless rollover pursuant to Subsection 4.4(g), all of such Lender’s Original Initial Term Loans for Tranche B Term Loans (each such Existing Term Lender, an “Exchanging Term Lender”, and each Existing Term Lender other than an Exchanging Lender, a “Non-Exchanging Term Lender”), the amount of Original Initial Term Loans held by such Exchanging Term Lender (or such lesser amount allocated to such Lender by the Administrative Agent) shall be exchanged for Tranche B Term Loans. For the avoidance of doubt, such Tranche B Term Loans held by an Exchanging Term Lender shall constitute “Rollover Indebtedness” for all purposes under this Agreement.

(iii) The Tranche B Term Loans, except as hereinafter provided, shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, ABR Loans or Eurodollar Loans.

Without limitation of Subsections 2.8 and 8.1(b)(i), once repaid, Tranche B Term Loans incurred hereunder may not be reborrowed. On the First Amendment Effective Date (after giving effect to the incurrence of Tranche B Term Loans on such date), the Tranche B Term Loan Commitments of each Tranche B Term Lender shall terminate.

2.2 Notes. (a) The Borrower agrees that, upon the request to the Administrative Agent by any Lender made on or prior to the Closing Date (in the case of requests relating to Loans other than the Tranche B Term Loans) or the First Amendment Effective Date (in the case of requests relating to the Tranche B Term Loans) or in connection with any assignment pursuant to Subsection 11.6(b), in order to evidence such Lender’s Loan, the Borrower shall execute and deliver to such Lender a promissory note substantially in the form of Exhibit A (each, as amended, supplemented, replaced or otherwise modified from time to time, a “Note”, and, collectively, the “Notes”), in each case with appropriate insertions therein as to payee, date and principal amount, payable to such Lender and in a principal amount equal to the unpaid principal amount of the applicable Loans made (or acquired by assignment pursuant to Subsection 11.6(b)) by such Lender to the Borrower. Each Note shall be dated the Closing Date and; provided, that each Note in respect of a Tranche B Term Loan shall be dated the First Amendment Effective Date. Each Note shall be payable as provided in Subsection 2.2(b) and provide for the payment of interest in accordance with Subsection 4.1.

(b) (i) The Original Initial Term Loans of all the Lenders shall be payable in consecutive quarterly installments beginning on January 26, 2018 up to and including the Original Initial Term Loan Maturity Date (subject to reduction as provided in Subsection 4.4), on the dates (each such date, an “Installment Date”) and in the principal amounts, subject to adjustment as set forth below, equal to the respective amounts set forth below (together with all accrued interest thereon) opposite the applicable Installment Dates (or, if less, the aggregate amount of such Original Initial Term Loans then outstanding):

 

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Date

  

Amount

The last Business Day of each Fiscal Quarter ending prior to the First Lender Joinder Agreement Effective Date

  

0.25% of the aggregate initial principal amount of the Original Initial Term Loans on the Closing Date

The last Business Day of each Fiscal Quarter ending on or after the First Lender Joinder Agreement Effective Date and prior to the Initial Term Loan Maturity Date

  

$3,258,565.99

Initial Term Loan Maturity Date

  

allAll unpaid aggregate principal amounts of any outstanding Initial Term Loans

(ii) The Tranche B Term Loans of all the Lenders shall be payable in consecutive quarterly installments beginning on []2, 2021 up to and including the Tranche B Term Loan Maturity Date (subject to reduction as provided in Subsection 4.4), on the dates (each such date, a “Tranche B Installment Date”) and in the principal amounts, subject to adjustment as set forth below, equal to the respective amounts set forth below (together with all accrued interest thereon) opposite the applicable Tranche B Installment Dates (or, if less, the aggregate amount of such Tranche B Term Loans then outstanding):

 

Date

  

Amount

The last Business Day of each Fiscal Quarter ending prior to the Tranche B Term Loan Maturity Date

  

0.25% of the aggregate initial principal amount of the Tranche B Term Loans on the First Amendment Effective Date

Tranche B Term Loan Maturity Date

  

All unpaid aggregate principal amounts of any outstanding Tranche B Term Loans

 

2 

NTD. To be the last Business Day of the first full Fiscal Quarter ending after the First Amendment Effective Date.

 

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2.3 Procedure for Initial Term Loan Borrowing. The Borrower shall have given the Administrative Agent notice (which notice must have been received by the Administrative Agent prior to 12:00 P.M., New York City time (or such later time as may be agreed by the Administrative Agent in its reasonable discretion), and shall be revocable at any time prior to funding) one Business Day prior to the Closing Date or the First Amendment Effective Date, as applicable, specifying the amount of the Initial Term Loans to be borrowed by the Borrower. Upon receipt of such notice, the Administrative Agent shall promptly notify each applicable Lender thereof. Each Lender having an Initial Term Loan Commitment will make the amount of its pro rata share of the applicable Initial Term Loan Commitments available to the Administrative Agent, in each case for the account of the Borrower at the office of the Administrative Agent specified in Subsection 11.2 prior to 10:00 A.M., New York City time (or, if the time period for the Borrower’s delivery of notice was extended, such later time as agreed to by the Borrower and the Administrative Agent in its reasonable discretion, but in no event less than one hour following notice), on the Closing Date or the First Amendment Effective Date, as applicable, in funds immediately available to the Administrative Agent. The Administrative Agent shall on such date credit the account of the Borrower on the books of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent.

2.4 [Reserved].

2.5 Repayment of Loans. (a) The Borrower hereby, unconditionally promises to pay to the Administrative Agent in the currency in which the applicable Loans are denominated for the account of each Lender the then unpaid principal amount of each Initial Term Loan of such Lender made to the Borrower, on the Initial Term Loan Maturity Date (or such earlier date on which the Initial Term Loans become due and payable pursuant to Section 9). The Borrower hereby, further agrees to pay interest (which payments shall be payable in the same currency in which the respective Loan is denominated) on the unpaid principal amount of such Loans from time to time outstanding from the date hereofClosing Date until payment in full thereof at the rates per annum, and on the dates, set forth in Subsection 4.1.

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

(c) The Administrative Agent shall maintain the Register pursuant to Subsection 11.6(b), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder, whether such Loan is a Term Loan, the Type thereof, the Tranche thereof and each Interest Period, if any, applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each applicable Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each applicable Lender’s share thereof.

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

 

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2.6 [Reserved].

2.7 [Reserved].

2.8 Incremental Facilities. (a) So long as no Event of Default under Subsection 9.1(a) or (f) exists or would arise therefrom, the Borrower shall have the right (on behalf of itself, or in the case of Incremental Loans the proceeds of which will be subject to an escrow or other similar arrangement, an Escrow Subsidiary (any such Escrow Subsidiary, an “Escrow Borrower”)), at any time and from time to time after the Closing Date, (i) to request new term loan commitments under one or more new term loan credit facilities to be included in this Agreement (the “Incremental Term Loan Commitments”), (ii) to increase the Existing Term Loans by requesting new term loan commitments to be added to an Existing Tranche of Term Loans (the “Supplemental Term Loan Commitments”), (iii) to request new commitments under one or more new revolving facilities to be included in this Agreement (the “Incremental Revolving Commitments”), and (iv) to request new letter of credit facility commitments under one or more new letter of credit facilities to be included in this Agreement (the “Incremental Letter of Credit Commitments” and, together with the Incremental Term Loan Commitments, Supplemental Term Loan Commitments and the Incremental Revolving Commitments, the “Incremental Commitments”), provided that, (i) the aggregate amount of Incremental Commitments permitted pursuant to this Subsection 2.8 shall not exceed, at the time the respective Incremental Commitment becomes effective (and after giving effect to the Incurrence of Indebtedness in connection therewith and the application of proceeds of any such Indebtedness, including to refinance other Indebtedness), an amount that could then be Incurred under this Agreement in compliance with Subsection 8.1(b)(i) and (ii) if any portion of an Incremental Commitment is to be incurred in reliance on clause (ii) of the definition of “Maximum Incremental Facilities Amount”, the Chief Financial Officer or a Responsible Officer of the Borrower shall have delivered a certificate to the Administrative Agent, certifying compliance with the financial test set forth in such clause (together with calculations demonstrating compliance with such test). Any loans made in respect of any such Incremental Commitment (other than Supplemental Term Loan Commitments) shall be made by creating a new Tranche. Each Incremental Commitment made available pursuant to this Subsection 2.8 shall be in a minimum aggregate amount of at least $10,000,000 and in integral multiples of $5,000,000 in excess thereof (or such lower minimum amounts or multiples as agreed to by the Administrative Agent in its reasonable discretion); provided that such amount may be less than $10,000,000 if such amount represents the then remaining aggregate principal amount available to be Incurred in compliance with Subsection 8.1(b)(i).

(b) Each request from the Borrower pursuant to this Subsection 2.8 shall set forth the requested amount and proposed terms of the relevant Incremental Commitments. The Incremental Commitments (or any portion thereof) may be made by any existing Lender or by any other bank or other financial institution (any such other bank or other financial institution, an “Additional Incremental Lender”, and the Additional Incremental Lenders together with any existing Lender providing Incremental Commitments, the “Incremental Lenders”); provided that if such Additional Incremental Lender is not already a Lender hereunder or an Affiliate of a

 

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Lender hereunder or an Approved Fund, the consent of the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed) shall be required (it being understood that any such Additional Incremental Lender that is an Affiliated Lender shall be subject to the provisions of Subsection 11.6(h), mutatis mutandis, to the same extent as if such Incremental Commitments and related Obligations had been obtained by such Lender by way of assignment). The Borrower may agree, in its sole discretion, to accept a lesser amount of any Incremental Commitment than originally requested. In the event there are Lenders and Additional Incremental Lenders that have committed to an Incremental Commitment in excess of the maximum amount requested (or permitted), then the Borrower shall have the right to allocate such commitments on whatever basis the Borrower determines is appropriate.

(c) Supplemental Term Loan Commitments shall become commitments under this Agreement pursuant to a supplement specifying the Tranche of Term Loans to be increased, executed by the Borrower and each increasing Lender substantially in the form attached hereto as Exhibit I-1 or in such other form as may be appropriate in the opinion of the Borrower and the Administrative Agent (the “Increase Supplement”) or by each Additional Incremental Lender substantially in the form attached hereto as Exhibit I-2 or in such other form as may be appropriate in the opinion of the Borrower and the Administrative Agent (the “Lender Joinder Agreement”), as the case may be, which shall be delivered to the Administrative Agent for recording in the Register. Upon effectiveness of the Lender Joinder Agreement each Additional Incremental Lender shall be a Lender for all intents and purposes of this Agreement and the term loan made pursuant to such Supplemental Term Loan Commitment shall be a Term Loan. Each Increase Supplement and/or Lender Joinder Agreement may, without the consent of any other Lender, effect such amendments to any Loan Documents (including amendments to Subsection 2.2(b) to increase the amortization payments or interest rate margins thereunder or add customary call protection provisions with respect thereto to allow for the applicable Incremental Loans to be fungible with an existing Tranche of Term Loans hereunder) as may be necessary or appropriate, in the opinion of the Borrower and the Administrative Agent, to effect the provisions of this Subsection 2.8(c).

(d) Incremental Commitments (other than Supplemental Term Loan Commitments) shall become commitments under this Agreement pursuant to an amendment (an “Incremental Commitment Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, an Escrow Borrower (if applicable) and each applicable Incremental Lender. An Incremental Commitment Amendment may, without the consent of any other Lender, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Borrower and the Administrative Agent, to effect the provisions of this Subsection 2.8; provided, however, that (i) (A) the Incremental Commitments will not be guaranteed by any Subsidiary of the Borrower other than the Subsidiary Guarantors (it being understood that the primary obligation of an Escrow Borrower shall not constitute a guarantee by a Subsidiary that is not a Subsidiary Guarantor), and (other than with respect to proceeds of such Incremental Commitments which are subject to an escrow or other similar arrangement and any related deposit of cash, Cash Equivalents and/or Temporary Cash Investments to cover interest and premium in respect of such Incremental Commitments) will be secured on a pari passu or (at the Borrower’s option) junior basis by the same Collateral securing the Term Loan Facility Obligations (so long as any such Incremental Commitments (and related Obligations) are subject to the ABL/Term Loan Intercreditor Agreement, a Junior Lien

 

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Intercreditor Agreement or an Other Intercreditor Agreement, as applicable, or (at the Borrower’s option) will be unsecured), (B) the Incremental Commitments and any incremental loans drawn thereunder (the “Incremental Loans”) shall rank pari passu in right of payment with or (at the Borrower’s option) junior to the Term Loan Facility Obligations and (C) no Incremental Commitment Amendment may provide for (I) any Incremental Commitment or any Incremental Loans to be secured by any Lien on any asset (other than proceeds of Incremental Loans which are subject to an escrow or similar arrangement and any related deposit of cash, Cash Equivalents and/or Temporary Cash Investments to cover interest and premium in respect of such Incremental Loans) of any Loan Party that does not also secure the Term Loan Facility Obligations and (II) so long as any Initial Term Loans are outstanding, any mandatory prepayment from the Net Available Cash Proceeds of Asset Dispositions (other than any Asset Disposition in respect of any assets, business or Person the acquisition of which was financed, all or in part, with Incremental Loans provided pursuant to such Incremental Commitment Amendment and the disposition of which was contemplated by any definitive agreement in respect of such acquisition) or Recovery Event or from Excess Cash Flow, to the extent the Net Available Cash Proceeds of such Asset Disposition or Recovery Event or such Excess Cash Flow are required to be applied to repay the Initial Term Loans pursuant to Subsection 4.4(e), on more than a ratable basis with the Initial Term Loans (after giving effect to any amendment in accordance with Subsection 11.1(d)(vi)); (ii) no Lender will be required to provide any such Incremental Commitment unless it so agrees; (iii) [reserved]; (iv) the maturity date and the weighted average life to maturity of any Incremental Term Loan Commitments shall be no earlier than or shorter than, as the case may be, the Initial Term Loan Maturity Date or the remaining weighted average life to maturity of the Initial Term Loans, as applicable (other than an earlier maturity date and/or shorter weighted average life to maturity (1) for customary bridge financings, which, subject to customary conditions (as determined by the Borrower in good faith, which determination shall be conclusive), would either be automatically converted into or required to be exchanged for permanent financing which does not provide for an earlier maturity date or a shorter weighted average life to maturity than the Initial Term Loan Maturity Date or the remaining weighted average life to maturity of the Initial Term Loans, as applicable or, (2) pursuant to an escrow or similar arrangement with respect to the proceeds of such Incremental Term Loans or (3) of Indebtedness under any Incremental Term Loan Commitments in an aggregate principal amount at any time outstanding (together with the aggregate principal amount of any Additional Obligations, any Refinancing Indebtedness and Indebtedness under any Specified Refinancing Term Loan Facility and any applicable Extended Tranche, in each case outstanding under the Earlier Maturity Date Basket) not in excess of the Earlier Maturity Date Basket); (v) the interest rate margins and (subject to clause (iv) above) amortization schedule applicable to the loans made pursuant to the Incremental Commitments shall be determined by the Borrower and the applicable Incremental Lenders; provided that in the event that the applicable interest rate margins for any syndicated floating rate Incremental Term Loans denominated in Dollars, the principal amount of which exceeds the MFN Threshold Amount, that are secured on a pari passu basis by the Collateral securing the First Lien Obligations, with a Stated Maturity that is earlier than 12 months following the InitialTranche B Term Loan Maturity Date, Incurred by the Borrower pursuant to the Ratio Incremental Facility, made on or prior to the 12-month anniversary of the Closing DateFirst Amendment Effective Date and not Incurred to finance or refinance, or otherwise in connection with, any acquisition of assets (including Capital Stock), business or Person, or any merger or consolidation of any Person with

 

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or into the Borrower or any Restricted Subsidiary, or any other Investment, are higher than the applicable interest rate margin for the InitialTranche B Term Loans by more than 75 basis points, then the effective interest rate margin for the applicable InitialTranche B Term Loans at the time such Incremental Commitments become effective (the “Existing Interest Rate”) shall be increased to the extent necessary so that the Existing Interest Rate is equal to the applicable interest rate margins for such Incremental Term Loan Commitment minus 75 basis points (the “Adjusted Interest Rate”, and the number of basis points by which the Existing Interest Rate is increased, the “Increased Amount”); provided, further that, in determining the applicable interest rate margins for the applicable InitialTranche B Term Loans and the Incremental Term Loans, (A) original issue discount (“OID”) or upfront fees payable generally to all participating Lenders in lieu of OID (which shall be deemed to constitute like amounts of OID) payable by the Borrower to the Lenders under such InitialTranche B Term Loans or any Incremental Term Loan, as applicable, in the initial primary syndication thereof shall be included (with OID and upfront fees being equated to interest rate based on an assumed four-year life to maturity) (provided that, if such InitialTranche B Term Loans are issued in a manner such that all such InitialTranche B Term Loans were not issued with a uniform amount of OID or upfront fees within the applicable Tranche of InitialTranche B Term Loans, the amount of OID and upfront fees attributable to the entire Tranche of InitialTranche B Term Loans shall be determined on a weighted average basis); (B) any arrangement or structuring fees payable in connection with the Incremental Term Loans or any other fees payable in connection with the Incremental Term Loans that are not(other than, in the case of syndicated Incremental Term Loans, and only if such fees are shared with all Additional Incremental Lenders providing such syndicated Incremental Term Loans) shall, in each case, be excluded; (C) any amendments to the Applicable Margin or effective interest rate margin on the applicable InitialTranche B Term Loans that became effective subsequent to the ClosingFirst Amendment Effective Date but prior to the effective time of such Incremental Term Loans shall also be included in such calculations, (D) if the Incremental Term Loans include an interest rate floor greater than the interest rate floor applicable to the applicable InitialTranche B Term Loans, such increased amount shall be equated to the applicable interest rate margin for purposes of determining whether an increase to the Applicable Margin for such InitialTranche B Term Loans shall be required, to the extent an increase in the interest rate floor for such InitialTranche B Term Loans would cause an increase in the interest rate then in effect thereunder, and in such case the interest rate floor (but not the Applicable Margin) applicable to such InitialTranche B Term Loans shall be increased by such amount to the extent necessary to adjust the applicable Existing Interest Rate to be equal to the applicable Adjusted Interest Rate, (E) if the Incremental Term Loans include an interest rate floor lower than the interest rate floor applicable to the applicable Tranche of InitialTranche B Term Loans or do not include any interest rate floor, to the extent a reduction in the interest rate floor for such InitialTranche B Term Loans would cause a reduction in the interest rate then in effect thereunder, an amount equal to the difference between the interest rate floor applicable to the InitialTranche B Term Loans and the interest rate floor applicable to such Incremental Term Loans (which shall be deemed to equal 0% for any Incremental Term Loans without any interest rate floor), but which in any event shall not exceed the maximum amount by which a reduction in the interest rate floor applicable to the InitialTranche B Term Loans would cause a reduction in the interest rate then in effect thereunder, shall reduce the applicable interest rate margin of the applicable Incremental Term Loans for purposes of determining whether an increase in the Existing Interest Rate shall be required and (F) if the applicable Tranche of InitialTranche B

 

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Term Loans includeincludes a pricing grid the interest rate margins in such pricing grid which are not in effect at the time the applicable Incremental Commitments become effective shall also each be increased by an amount equal to the Increased Amount; (vi) such Incremental Commitment Amendment may provide (1) for the inclusion, as appropriate, of Additional Incremental Lenders in any required vote or action of the Required Lenders or of the Lenders of each Tranche hereunder, (2) class voting and other class protections for any additional credit facilities, (3) for the amendment of the definitions of “Additional Obligations”, “Disqualified Stock”, “Junior Capital” and “Refinancing Indebtedness” and Subsection 8.8(b), in each case only to extend the maturity date and the weighted average life to maturity requirements, from the Initial Term Loan Maturity Date and remaining weighted average life to maturity of the Initial Term Loans to the extended maturity date and the remaining weighted average life to maturity of such Incremental Term Loans, as applicable, (4) in the case of an Incremental Revolving Commitment or an Incremental Letter of Credit Commitment, provide for amendments and modifications necessary or desirable to account for the Incremental Revolving Commitments and Incremental Letter of Credit Commitments to be included in this Agreement, in each case on terms agreed by the Borrower and the Lenders providing such Commitments (including any swingline lender or issuing lender) and with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed) and (5) for the amendment of clause (iii) of the definition of “Additional Obligations” to provide for the applicable mandatory prepayment protections to apply to such Incremental Term Loans; and (vii) the other terms and documentation in respect thereof, to the extent not consistent with this Agreement as in effect prior to giving effect to the Incremental Commitment Amendment, shall otherwise be reasonably satisfactory to the Borrower; provided that to the extent such terms and documentation are not consistent with, in the case of Incremental Term Loans, the terms and documentation governing the Initial Term Loans (except to the extent permitted by clauses (iv), (v) or (vi) above), they shall be reasonably satisfactory to the Borrower and the Administrative Agent.

2.9 Permitted Debt Exchanges. (a) Notwithstanding anything to the contrary contained in this Agreement, pursuant to one or more offers (each, a “Permitted Debt Exchange Offer”) made from time to time by the Borrower to all Lenders (other than any Lender that, if requested by the Borrower, is unable to certify that it is either a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (as defined in Rule 501 under the Securities Act)) with outstanding Term Loans of a particular Tranche, as selected by the Borrower, the Borrower may from time to time following the Closing Date consummate one or more exchanges of Term Loans of such Tranche for Additional Obligations in the form of notes (such notes, “Permitted Debt Exchange Notes”, and each such exchange a “Permitted Debt Exchange”), so long as the following conditions are satisfied: (i) the aggregate principal amount (calculated on the face amount thereof) of Term Loans exchanged shall be equal to or more than the aggregate principal amount (calculated on the face amount thereof) of Permitted Debt Exchange Notes issued in exchange for such Term Loans, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such exchange, (ii) the aggregate principal amount (calculated on the face amount thereof) of all Term Loans exchanged by the Borrower pursuant to any Permitted Debt Exchange shall automatically be cancelled and retired by the Borrower on the date of the settlement thereof (and, if requested by the Administrative Agent, any applicable exchanging Lender shall execute and deliver to the Administrative Agent an Assignment and Acceptance, or such other form as may be reasonably

 

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requested by the Administrative Agent, in respect thereof pursuant to which the respective Lender assigns its interest in the Term Loans being exchanged pursuant to the Permitted Debt Exchange to the Borrower for immediate cancellation), (iii) if the aggregate principal amount of all Term Loans (calculated on the face amount thereof) tendered by Lenders in respect of the relevant Permitted Debt Exchange Offer (with no Lender being permitted to tender a principal amount of Term Loans which exceeds the principal amount of the applicable Tranche actually held by it) shall exceed the maximum aggregate principal amount of Term Loans offered to be exchanged by the Borrower pursuant to such Permitted Debt Exchange Offer, then the Borrower shall exchange Term Loans subject to such Permitted Debt Exchange Offer tendered by such Lenders ratably up to such maximum amount based on the respective principal amounts so tendered, (iv) each such Permitted Debt Exchange Offer shall be made on a pro rata basis to the Lenders (other than any Lender that, if requested by the Borrower, is unable to certify that it is either a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (as defined in Rule 501 under the Securities Act)) based on their respective aggregate principal amounts of outstanding Term Loans of the applicable Tranche, (v) all documentation in respect of such Permitted Debt Exchange shall be consistent with the foregoing and all written communications generally directed to the Lenders in connection therewith shall be in form and substance consistent with the foregoing and made in consultation with the Administrative Agent and (vi) any applicable Minimum Exchange Tender Condition shall be satisfied. Notwithstanding anything to the contrary herein, no Lender shall have any obligation to agree to have any of its Loans exchanged pursuant to any Permitted Debt Exchange Offer.

(b) With respect to all Permitted Debt Exchanges effected by the Borrower pursuant to this Subsection 2.9, (i) such Permitted Debt Exchanges (and the cancellation of the exchanged Term Loans in connection therewith) shall not constitute voluntary or mandatory payments or prepayments for purposes of Subsection 4.4 and (ii) such Permitted Debt Exchange Offer shall be made for not less than $5,000,000 in aggregate principal amount of Term Loans (or, in each case, such lower principal amount as agreed to by the Administrative Agent in its reasonable discretion), provided that subject to the foregoing clause (ii), the Borrower may at its election specify as a condition (a “Minimum Exchange Tender Condition”) to consummating any such Permitted Debt Exchange that a minimum amount (to be determined and specified in the relevant Permitted Debt Exchange Offer in the Borrower’s discretion) of Term Loans be tendered.

(c) In connection with each Permitted Debt Exchange, the Borrower shall provide the Administrative Agent at least tenfive Business Days’ (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and the Borrower and the Administrative Agent, acting reasonably, shall mutually agree to such procedures as may be necessary or advisable to accomplish the purposes of this Subsection 2.9 and without conflict with Subsection 2.9(d); provided that the terms of any Permitted Debt Exchange Offer shall provide that the date by which the relevant Lenders are required to indicate their election to participate in such Permitted Debt Exchange shall be not less than five Business Days following the date on which the Permitted Debt Exchange Offer is made (or such shorter period as may be agreed to by the Administrative Agent in its reasonable discretion).

 

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(d) The Borrower shall be responsible for compliance with, and hereby agrees to comply with, all applicable securities and other laws in connection with each Permitted Debt Exchange, it being understood and agreed that (x) neither the Administrative Agent nor any Lender assumes any responsibility in connection with the Borrower’s compliance with such laws in connection with any Permitted Debt Exchange (other than the Borrower’s reliance on any certificate delivered by a Lender pursuant to Subsection 2.9(a) above for which such Lender shall bear sole responsibility) and (y) each Lender shall be solely responsible for its compliance with any applicable “insider trading” laws and regulations to which such Lender may be subject under the Exchange Act.

2.10 Extension of Term Loans. (a) The Borrower may at any time and from time to time request that all or a portion of the Term Loans of one or more Tranches (including any Extended Term Loans) existing at the time of such request (each, an “Existing Term Tranche” or “Existing Tranche” and the Term Loans of such Tranche, the “Existing Term Loans” or the “Existing Loans”) be converted to extend the scheduled maturity date(s) of any payment of principal or scheduled termination date(s) of any commitments, as applicable, with respect to all or a portion of any principal or committed amount of any Existing Tranche (any such Existing Tranche which has been so extended, an “Extended Term Tranche” or “Extended Tranche”, and the Term Loans of such Extended Tranches, the “Extended Term Loans” or the “Extended Loans”) and to provide for other terms consistent with this Subsection 2.10; provided that (i) any such request shall be made by the Borrower to all Lenders with Term Loans with a like maturity date (whether under one or more Tranches) on a pro rata basis (based on the aggregate outstanding principal amount of the applicable Term Loans), and (ii) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrower. In order to establish any Extended Tranche, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Tranche) (an “Extension Request”) setting forth the proposed terms of the Extended Tranche to be established, which terms shall be identical to those applicable to the Existing Tranche from which they are to be extended (the “Specified Existing Tranche”), except (x) all or any of the final maturity dates of such Extended Tranches may be delayed to later dates than the final maturity dates of the Specified Existing Tranche, (y) (A) the interest margins with respect to the Extended Tranche may be higher or lower than the interest margins for the Specified Existing Tranche and/or (B) additional fees may be payable to the Lenders providing such Extended Tranche in addition to or in lieu of any increased margins contemplated by the preceding clause (A), in each case to the extent provided in the applicable Extension Amendment, and (z) amortization with respect to the Extended Term Tranche may be greater or lesser than amortization for the Specified Existing Tranche, so long as the Extended Term Tranche does not have a weighted average life to maturity shorter than the remaining weighted average life to maturity of the Specified Existing Tranche (provided that any applicable Extended Tranche may have an earlier maturity date and/or shorter weighted average life to maturity (1) in the case of customary bridge financings, which, subject to customary conditions (as determined by the Borrower in good faith, which determination shall be conclusive), would either be automatically converted into or required to be exchanged for permanent financing which does not provide for such earlier maturity date or such shorter weighted average life to maturity, (2) pursuant to an escrow or similar arrangement with respect to the proceeds of such Extended Tranche or (3) if the aggregate principal amount of such applicable Extended Tranche at any time outstanding (together with the aggregate principal amount of any Additional Obligations, any Refinancing

 

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Indebtedness and Indebtedness under any Incremental Term Loan Commitments and any Specified Refinancing Term Loan Facility, in each case outstanding under the Earlier Maturity Date Basket) does not exceed the Earlier Maturity Date Basket); provided that, notwithstanding anything to the contrary in this Subsection 2.10 or otherwise, assignments and participations of Extended Tranches shall be governed by the same or, at the Borrower’s discretion, more restrictive assignment and participation provisions than the assignment and participation provisions applicable to Initial Term Loans set forth in Subsection 11.6. No Lender shall have any obligation to agree to have any of its Existing Loans converted into an Extended Tranche pursuant to any Extension Request. Any Extended Tranche shall constitute a separate Tranche of Term Loans from the Specified Existing Tranches and from any other Existing Tranches (together with any other Extended Tranches so established on such date).

(b) The Borrower shall provide the applicable Extension Request at least tenfive Business Days (or such shorter period as the Administrative Agent may agree in its reasonable discretion) prior to the date on which Lenders under the applicable Existing Tranche(s) are requested to respond. Any Lender (an “Extending Lender”) wishing to have all or a portion of its Specified Existing Tranche converted into an Extended Tranche shall notify the Administrative Agent (each, an “Extension Election”) on or prior to the date specified in such Extension Request of the amount of its Specified Existing Tranche that it has elected to convert into an Extended Tranche. In the event that the aggregate amount of the Specified Existing Tranche subject to Extension Elections exceeds the amount of Extended Tranches requested pursuant to the Extension Request, the Specified Existing Tranches subject to Extension Elections shall be converted to Extended Tranches on a pro rata basis based on the amount of Specified Existing Tranches included in each such Extension Election. In connection with any extension of Term Loans pursuant to this Subsection 2.10 (each, an “Extension”), the Borrower shall agree to such procedures regarding timing, rounding and other administrative adjustments to ensure reasonable administrative management of the credit facilities hereunder after such Extension, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Subsection 2.10. The Borrower may amend, revoke or replace an Extension Request pursuant to procedures reasonably acceptable to the Administrative Agent at any time prior to the date (the “Extension Request Deadline”) on which Lenders under the applicable Existing Term Tranche are requested to respond to the Extension Request. Any Lender may revoke an Extension Election at any time prior to 5:00 P.M. on the date that is two Business Days prior to the Extension Request Deadline, at which point the Extension Election becomes irrevocable (unless otherwise agreed by the Borrower). The revocation of an Extension Election prior to the Extension Request Deadline shall not prejudice any Lender’s right to submit a new Extension Election prior to the Extension Request Deadline.

(c) Extended Tranches shall be established pursuant to an amendment (an “Extension Amendment”) to this Agreement (which may include amendments to (i) provisions related to maturity, interest margins, fees or amortization referenced in clauses (x) through (z) of Subsection 2.10(a), (ii) the definitions of “Additional Obligations”, “Disqualified Stock”, “Junior Capital” and “Refinancing Indebtedness” and Subsection 8.8(b) to amend the maturity date and the weighted average life to maturity requirements, from the Initial Term Loan Maturity Date and remaining weighted average life to maturity of the Initial Term Loans to the extended maturity date and the remaining weighted average life to maturity of such Extended Tranche, as

 

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applicable and (iii) clause (iii) of the definition of “Additional Obligations” to provide for the applicable mandatory prepayment protections to apply to such Extended Term Tranche, and which in each case, except to the extent expressly contemplated by the third to last sentence of this Subsection 2.10(c) and notwithstanding anything to the contrary set forth in Subsection 11.1, shall not require the consent of any Lender other than the Extending Lenders with respect to the Extended Tranches established thereby) executed by the Loan Parties, the Administrative Agent, and the Extending Lenders. No Extension Amendment shall provide for any Extended Tranche in an aggregate principal amount that is less than $10,000,000 (or, in each case, such lower principal amount as agreed to by the Administrative Agent in its reasonable discretion). Notwithstanding anything to the contrary in this Agreement and without limiting the generality or applicability of Subsection 11.1 to any Subsection 2.10 Additional Amendments, any Extension Amendment may provide for additional terms and/or additional amendments other than those referred to or contemplated above (any such additional amendment, a “Subsection 2.10 Additional Amendment”) to this Agreement and the other Loan Documents; provided that such Subsection 2.10 Additional Amendments do not become effective prior to the time that such Subsection 2.10 Additional Amendments have been consented to (including pursuant to consents applicable to holders of any Extended Tranches provided for in any Extension Amendment) by such of the Lenders, Loan Parties and other parties (if any) as may be required in order for such Subsection 2.10 Additional Amendments to become effective in accordance with Subsection 11.1; provided, further, that no Extension Amendment may provide for any Extended Tranche to be secured by any Collateral or other assets of any Loan Party that does not also secure the Specified Existing Tranche. It is understood and agreed that each Lender has consented for all purposes requiring its consent, and shall at the effective time thereof be deemed to consent to each amendment to this Agreement and the other Loan Documents authorized by this Subsection 2.10 and the arrangements described above in connection therewith except that the foregoing shall not constitute a consent on behalf of any Lender to the terms of any Subsection 2.10 Additional Amendment. In connection with any Extension Amendment, at the request of the Administrative Agent or the Extending Lenders, the Borrower shall deliver an opinion of counsel reasonably acceptable to the Administrative Agent as to the enforceability of this Agreement as amended by such Extension Amendment, and such of the other Loan Documents (if any) as may be amended thereby.

(d) Notwithstanding anything to the contrary contained in this Agreement, on any date on which any Existing Tranche is converted to extend the related scheduled maturity date(s) in accordance with clause (a) above (an “Extension Date”), in the case of the Specified Existing Tranche of each Extending Lender, the aggregate principal amount of such Specified Existing Tranche shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Tranche so converted by such Lender on such date, and such Extended Tranches shall be established as a separate Tranche from the Specified Existing Tranche and from any other Existing Tranches (together with any other Extended Tranches so established on such date).

(e) If, in connection with any proposed Extension Amendment, any Lender declines to consent to the applicable extension on the terms and by the deadline set forth in the applicable Extension Request (each such other Lender, a “Non-Extending Lender”) then the Borrower may, on notice to the Administrative Agent and the Non-Extending Lender, (i) replace such Non-Extending Lender by causing such Lender to (and such Lender shall be obligated to)

 

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assign pursuant to Subsection 11.6 (with the assignment fee and any other costs and expenses to be paid by the Borrower in such instance) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender; provided, further, that the applicable assignee shall have agreed to provide Extended Loans on the terms set forth in such Extension Amendment; and provided, further, that all obligations of the Borrower owing to the Non-Extending Lender relating to the Existing Loans so assigned shall be paid in full by the assignee Lender (or, at its option, the Borrower) to such Non-Extending Lender concurrently with such Assignment and Acceptance or (ii) if no Event of Default exists under Subsection 9.1(a) or (f), upon notice to the Administrative Agent, prepay the Existing Loans in whole or in part, subject to Subsection 4.12, without premium or penalty. In connection with any such replacement under this Subsection 2.10, if the Non-Extending Lender does not execute and deliver to the Administrative Agent a duly completed Assignment and Acceptance and/or any other documentation necessary to reflect such replacement by the later of (A) the date on which the replacement Lender executes and delivers such Assignment and Acceptance and/or such other documentation and (B) the date as of which all obligations of the Borrower owing to the Non-Extending Lender relating to the Existing Loans so assigned shall be paid in full by the assignee Lender (or, at its option, the Borrower) to such Non-Extending Lender, then such Non-Extending Lender shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date, the Administrative Agent shall record such assignment in the Register and the Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Non-Extending Lender.

(f) Following any Extension Date, with the written consent of the Borrower, any Non-Extending Lender may elect to have all or a portion of its Existing Loans deemed to be an Extended Loan under the applicable Extended Tranche on any date (each date a “Designation Date”) prior to the maturity date of such Extended Tranche; provided that such Lender shall have provided written notice to the Borrower and the Administrative Agent at least 10 Business Days prior to such Designation Date (or such shorter period as the Administrative Agent may agree in its reasonable discretion). Following a Designation Date, the Existing Loans held by such Lender so elected to be extended will be deemed to be Extended Loans of the applicable Extended Tranche, and any Existing Loans held by such Lender not elected to be extended, if any, shall continue to be “Existing Loans” of the applicable Tranche.

(g) With respect to all Extensions consummated by the Borrower pursuant to this Subsection 2.10, (i) such Extensions shall not constitute optional or mandatory payments or prepayments for purposes of Subsection 4.4 and (ii) no Extension Request is required to be in any minimum amount or any minimum increment, provided that the Borrower may at its election specify as a condition (a “Minimum Extension Condition”) to consummating any such Extension that a minimum amount (to be determined and specified in the relevant Extension Request in the Borrower’s sole discretion and which may be waived by the Borrower) of Existing Loans of any or all applicable Tranches be extended. The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this Subsection 2.10 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Loans on such terms as may be set forth in the relevant Extension Request) and hereby waive the requirements of any provision of this Agreement (including Subsections 4.4 and 4.8) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Subsection 2.10.

 

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2.11 Specified Refinancing Facilities. (a) The Borrower may, from time to time, add one or more new term loan facilities (the “Specified Refinancing Term Loan Facilities”) to the Facilities to refinance all or any portion of any Tranche of Term Loans then outstanding under this Agreement; provided that (i) the Specified Refinancing Facilities will not be guaranteed by any Subsidiary of the Borrower other than the Subsidiary Guarantors, and will be secured on a pari passu or (at the Borrower’s option) junior basis by the same Collateral securing the Term Loan Facility Obligations (so long as any applicable Specified Refinancing Amendments (and related Obligations) are subject to the ABL/Term Loan Intercreditor Agreement, a Junior Lien Intercreditor Agreement or an Other Intercreditor Agreement) or (at the Borrower’s option) will be unsecured, (ii) the Specified Refinancing Term Loan Facilities and any term loans drawn thereunder (the “Specified Refinancing Term Loans”) shall rank pari passu in right of payment with or (at the Borrower’s option) junior to the Term Loan Facility Obligations, (iii) no Specified Refinancing Amendment may provide for any Specified Refinancing Facility or any Specified Refinancing Loans to be secured by any Collateral or other assets of any Loan Party that do not also secure the Term Loan Facility Obligations, (iv) the Specified Refinancing Facilities will have such pricing, amortization (subject to clause (vi) below) and optional and mandatory prepayment terms as may be agreed by the Borrower and the applicable Lenders thereof, (v) [reserved], (vi) the maturity date and the weighted average life to maturity of any Specified Refinancing Term Loan Facility shall be no earlier than or shorter than, as the case may be, the Maturity Date of the Tranche of Term Loans being refinanced or the remaining weighted average life to maturity of the Term Loans being refinanced, as applicable (other than an earlier maturity date and/or shorter weighted average life to maturity (1) for customary bridge financings, which, subject to customary conditions (as determined by the Borrower in good faith, which determination shall be conclusive), would either be automatically converted into or required to be exchanged for permanent financing which does not provide for an earlier maturity date or a shorter weighted average life to maturity than the Maturity Date of the Tranche of Term Loans being refinanced or the remaining weighted average life to maturity of the Term Loans being refinanced, as applicable), (2) pursuant to an escrow or similar arrangement with respect to the proceeds of such Specified Refinancing Term Loans or (3) of Indebtedness under any Specified Refinancing Term Loan Facility in an aggregate principal amount at any time outstanding (together with any Additional Obligations, any Refinancing Indebtedness and Indebtedness under any Incremental Term Loan Commitments and any applicable Extended Tranche, in each case outstanding under the Earlier Maturity Date Basket) not in excess of the Earlier Maturity Date Basket), (vii) the Net Cash Proceeds of such Specified Refinancing Facility shall be applied, substantially concurrently with the incurrence thereof, to the pro rata prepayment of outstanding Loans being so refinanced, in each case pursuant to Subsection 4.4 (including prepayments made with an exchange of Rollover Indebtedness under the applicable Specified Refinancing Facility as provided for in the final sentence of Subsection 4.4(g)); and (viii) the Specified Refinancing Facilities shall not have a principal or commitment amount greater than the Loans being refinanced plus the aggregate amount of all fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing.

 

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(b) Each request from the Borrower pursuant to this Subsection 2.11 shall set forth the requested amount and proposed terms of the relevant Specified Refinancing Facility. The Specified Refinancing Facilities (or any portion thereof) may be made by any existing Lender or by any other bank or financial institution (any such bank or other financial institution, an “Additional Specified Refinancing Lender”, and the Additional Specified Refinancing Lenders together with any existing Lender providing Specified Refinancing Facilities, the “Specified Refinancing Lenders”); provided that if such Additional Specified Refinancing Lender is not already a Lender hereunder or an Affiliate of a Lender hereunder or an Approved Fund, the consent of the Administrative Agent and (such consent not to be unreasonably withheld, conditioned or delayed) shall be required (it being understood that any such Additional Specified Refinancing Lender that is an Affiliated Lender shall be subject to the provisions of Subsection 11.6(h), mutatis mutandis, to the same extent as if such Specified Refinancing Facilities and related Obligations had been obtained by such Lender by way of assignment).

(c) Specified Refinancing Facilities shall become facilities under this Agreement pursuant to a Specified Refinancing Amendment to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower and each applicable Specified Refinancing Lender. Any Specified Refinancing Amendment may, without the consent of any other Lender, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Borrower and the Administrative Agent, to effect the provisions of this Subsection 2.11, in each case on terms consistent with this Subsection 2.11.

(d) Any loans made in respect of any such Specified Refinancing Facility shall be made by creating a new Tranche. Each Specified Refinancing Facility made available pursuant to this Subsection 2.11 shall be in a minimum aggregate amount of at least $10,000,000 and in integral multiples of $5,000,000 in excess thereof (or, such lower minimum amounts or multiples as agreed to by the Administrative Agent in its reasonable discretion).

(e) The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Specified Refinancing Amendment. Each of the parties hereto hereby agrees that, upon the effectiveness of any Specified Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary or appropriate to reflect the existence and terms of the Specified Refinancing Facilities incurred pursuant thereto (including the addition of such Specified Refinancing Facilities as separate “Facilities” and “Tranches” hereunder and treated in a manner consistent with the Facilities being refinanced, including for purposes of prepayments and voting). Any Specified Refinancing Amendment may, without the consent of any Person other than the Borrower, the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed) and the Lenders providing such Specified Refinancing Facilities, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Subsection 2.11.

 

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SECTION 3

[Reserved]

SECTION 4

General Provisions Applicable to Loans

4.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Adjusted LIBOR Rate determined for such day plus the Applicable Margin in effect for such day.

(b) Each ABR Loan shall bear interest for each day that it is outstanding at a rate per annum equal to the Alternate Base Rate in effect for such day plus the Applicable Margin in effect for such day.

(c) [Reserved].

(d) [Reserved].

(e) If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable thereon or (iii) any other amount payable hereunder shall not be paid when due (whether at the Stated Maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto pursuant to the relevant foregoing provisions of this Subsection 4.1, plus 2.00% and, (y) in the case of other amounts (including overdue interest), the rate that would otherwise be applicable to principal of the related Loan pursuant to the relevant foregoing provisions of this Subsection 4.1, plus 2.00% and (z) in the case of other amounts, the rate described in clause (b) of this Subsection 4.1 for ABR Loans accruing interest at the Alternate Base Rate plus 2.00%, in each case from the date of such nonpayment until such amount is paid in full (after as well as before judgment); provided that (1) no amount shall be payable pursuant to this Subsection 4.1(e) to a Defaulting Lender so long as such Lender shall be a Defaulting Lender and (2) no amounts shall accrue pursuant to this Subsection 4.1(e) on any overdue amount or other amount payable to a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

(f) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to clause (e) of this Subsection 4.1 shall be payable from time to time on demand exercised in accordance with Subsection 9.2.

(g) It is the intention of the parties hereto to comply strictly with applicable usury laws; accordingly, it is stipulated and agreed that the aggregate of all amounts which constitute interest under applicable usury laws, whether contracted for, charged, taken, reserved, or received, in connection with the indebtedness evidenced by this Agreement or any Notes, or any other document relating or referring hereto or thereto, now or hereafter existing, shall never exceed under any circumstance whatsoever the maximum amount of interest allowed by applicable usury laws.

 

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4.2 Conversion and Continuation Options. (a) Subject to its obligations pursuant to Subsection 4.12(c), the Borrower may elect from time to time to convert outstanding Loans of a given Tranche denominated in Dollars from Eurodollar Loans to ABR Loans by giving the Administrative Agent irrevocable notice of such election prior to 1:00 P.M., New York City time two Business Days (or such shorter period as may be agreed by the Administrative Agent in its reasonable discretion) prior to such election. The Borrower may elect from time to time to convert outstanding Loans of a given Tranche from ABR Loans to Eurodollar Loans by giving the Administrative Agent irrevocable notice of such election prior to 1:00 P.M., New York City time at least three Business Days (or such shorter period as may be agreed by the Administrative Agent in its reasonable discretion) prior to such election. Any such notice of conversion to Eurodollar Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each affected Lender thereof. All or any part of outstanding Eurodollar Loans denominated in Dollars or ABR Loans may be converted as provided herein, provided that (i) (unless the Required Lenders otherwise consent) no Loan may be converted into a Eurodollar Loan when any Default or Event of Default has occurred and is continuing and, in the case of any Default (other than a Default under Subsection 9.1(f)), the Administrative Agent has given notice to the Borrower that no such conversions may be made and (ii) no Loan may be converted into a Eurodollar Loan after the date that is one month prior to the applicable Maturity Date.

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving notice to the Administrative Agent of the length of the next Interest Period to be applicable to such Eurodollar Loan, determined in accordance with the applicable provisions of the term “Interest Period” set forth in Subsection 1.1, provided that no Eurodollar Loan denominated in Dollars may be continued as such (i) (unless the Required Lenders otherwise consent) when any Default or Event of Default has occurred and is continuing and, in the case of any Default (other than a Default under Subsection 9.1(f)), the Administrative Agent has given notice to the Borrower that no such continuations may be made or (ii) after the date that is one month prior to the applicable Maturity Date, and provided, further, that if the Borrower shall fail to give any required notice as described above in this clause (b) or if such continuation is not permitted pursuant to the preceding proviso such Eurodollar Loans shall be automatically converted to ABR Loans as on the last day of such then expiring Interest Period. Upon receipt of any such notice of continuation pursuant to this Subsection 4.2(b), the Administrative Agent shall promptly notify each affected Lender thereof.

4.3 Minimum Amounts; Maximum Sets. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Set shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof (provided that, notwithstanding the foregoing (x) any Loan may be borrowed in an amount equal to the aggregate amount of the Commitments in respect of such Loan and (y) any Loan may be converted or continued in its entirety), and so that there shall not be more than 20 Sets at any one time outstanding.

 

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4.4 Optional and Mandatory Prepayments. (a) Optional Prepayment of Term Loans. The Borrower may at any time and from time to time prepay the Term Loans, in whole or in part, subject to Subsection 4.12, without premium or penalty (except as provided in Subsection 4.5(b)), upon notice by the Borrower to the Administrative Agent prior to 1:00 P.M., New York City time, at least three Business Days (or such shorter period as may be agreed by the Administrative Agent in its reasonable discretion) prior to the date of prepayment (in the case of Eurodollar Loans), or prior to 12:00 P.M., New York City time on the date of prepayment (in the case of ABR Loans) (or such later time as may be agreed by the Administrative Agent in its reasonable discretion) (in the case of ABR Loans). Such notice shall specify, in the case of any prepayment of Term Loans, the applicable Tranche being repaid, and if a combination thereof, the principal amount allocable to each, the date and amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and, in each case if a combination thereof, the principal amount allocable to each. Any such notice may state that such notice is conditioned upon the occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in which case such notice may be revoked or extended by the Borrower (by written notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied or waived. Upon the receipt of any such notice the Administrative Agent shall promptly notify each affected Lender thereof. If any such notice is given and not revoked, the amount specified in such notice shall be due and payable on the date specified therein, together with (if a Eurodollar Loan is prepaid other than at the end of the Interest Period applicable thereto) any amounts payable pursuant to Subsection 4.12. Partial prepayments pursuant to this Subsection 4.4(a) shall be in multiples of $1,000,000; provided that, notwithstanding the foregoing, any Term Loan may be prepaid in its entirety. Each prepayment of Original Initial Term Loans pursuant to this Subsection 4.4(a) made on or prior to the six-month anniversary of the Closing Date in an amount equal to the Net Cash Proceeds received by the Borrower or any Restricted Subsidiary from its incurrence of new Indebtedness under first lien secured bank financing in a Repricing Transaction shall be accompanied by the payment of the fee required by Subsection 4.5(b).(i). Each prepayment of Tranche B Term Loans pursuant to this Subsection 4.4(a) made prior to the date that is six months after the First Amendment Effective Date in an amount equal to the Net Cash Proceeds received by the Borrower or any Restricted Subsidiary from its incurrence of new Indebtedness under first lien secured bank financing in a Repricing Transaction shall be accompanied by the payment of the fee required by Subsection 4.5(b)(ii).

(b) [Reserved].

(c) [Reserved].

(d) [Reserved].

(e) Mandatory Prepayment of Term Loans. (i) The Borrower shall, in accordance with Subsection 4.4(g), prepay the Term Loans to the extent required by Subsection 8.4(b) (subject to Subsection 8.4(c)), (ii) if on or after the Closing Date, the Borrower or any of its Restricted Subsidiaries shall Incur (A) Specified Refinancing Term Loans or (B) Indebtedness for borrowed money (excluding Indebtedness permitted pursuant to Subsection 8.1), the Borrower shall, in accordance with Subsection 4.4(g), prepay (or, exchange for Rollover Indebtedness) the Term Loans (or, in the case of the Incurrence of any Specified Refinancing Term Loans, the Tranche of Term Loans being refinanced) in an amount equal to 100.0% of the Net Cash Proceeds thereof (plus any portion of such Indebtedness which represents Rollover

 

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Indebtedness) minus the portion of such Net Cash Proceeds applied or offered (to the extent the Borrower or any of its Subsidiaries is required by the terms thereof) to prepay, repay or purchase Pari Passu Indebtedness on a no more than pro rata basis with the Term Loans, in each case with such prepayment to be made on or before the fifth Business Day following notice given to each Lender of the Prepayment Date, as contemplated by Subsection 4.4(h) and (iii) the Borrower shall, in accordance with Subsection 4.4(g), prepay the Term Loans within five Business Days following the day on which financial statements in respect of the immediately preceding fiscal year are delivered pursuant to Subsection 7.1(a) (commencing with the fiscal year ending on or about February 3, 2019) (or, if later, the date on which such financial statements are required to be delivered) (each, an “ECF Payment Date”), in an amount equal to (A) (1) 50.0% (as may be adjusted pursuant to the last proviso of this clause (iii)) of the Borrower’s Excess Cash Flow for such fiscal year (such amount, the “Applicable ECF Amount”), if and to the extent that the amount of such Excess Cash FlowApplicable ECF Amount exceeds $10,000,00020,000,000 , minus (2) the sum of (tq) the aggregate principal amount of Term Loans (including Incremental Term Loans, Extended Term Loans and Specified Refinancing Term Loans) prepaid pursuant to Subsection 4.4(a), Incremental Revolving Loans voluntarily prepaid to the extent accompanied by a corresponding permanent Incremental Revolving Commitment reduction, Pari Passu Indebtedness (in the case of revolving loans, to the extent accompanied by a corresponding permanent commitment reduction) voluntarily prepaid, repaid, redeemed, repurchased or retired and any prepayment of Term Loans (including Incremental Term Loans, Extended Term Loans and Specified Refinancing Term Loans) pursuant to Subsection 4.4(l) or 11.6(h) (by the Borrower or its Restricted Subsidiaries) (provided that such deduction for prepayments pursuant to Subsection 4.4(l) or 11.6(h) (by the Borrower or its Restricted Subsidiaries) shall be limited to the actual cash amount of such prepayment), in each case during such fiscal year (which, in any event, shall not include any designated prepayment pursuant to clause (wu ) below), (ur ) the aggregate principal amount of Term Loans (including Incremental Term Loans, Extended Term Loans and Specified Refinancing Term Loans) repaid pursuant to Subsection 2.2 and Pari Passu Indebtedness repaid pursuant to any amortization schedule provided for in such facility, in each case during such fiscal year, (s) the aggregate amount of cash consideration (including any expenses, charges and losses in the form of earn-out obligations and contingent consideration obligations (including to the extent accounted for as performance and retention bonuses, compensation or otherwise) and adjustments thereof and purchase price adjustments) paid by the Borrower and the Restricted Subsidiaries (on a consolidated basis) in connection with Investments (including acquisitions) made during such fiscal year constituting “Permitted Investments” (other than Permitted Investments of the type described in clause (iii) of the definition thereof and intercompany Investments by and among the Borrower and its Restricted Subsidiaries) or made pursuant to Subsection 8.2 (which, in any event, shall not include any deemed applicationContract Consideration previously deducted pursuant to clause (z) below), (vt) the amount of Capital Expenditures either made in cash or accrued during such fiscal year (provided that, whether any such Capital Expenditures shall be deducted for the fiscal year in which cash payments for such Capital Expenditures have been paid or the fiscal year in which such Capital Expenditures have been accrued shall be at the Borrower’s election; provided, further that, in no case shall any accrual of a Capital Expenditure which has previously been deducted under this clause (2t) give rise to a subsequent deduction upon the making of such Capital Expenditure in cash in the same or any subsequent fiscal year) (which, in any event, shall not include any deemed applicationCapital Expenditures previously deducted pursuant to clause

 

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(z) below), (wu) the aggregate principal amount of Term Loans (including Incremental Term Loans, Extended Term Loans and Specified Refinancing Term Loans) repaid or prepaid pursuant to Subsection 2.2(b) or 4.4(a), Incremental Revolving Loans voluntarily prepaid to the extent accompanied by a corresponding permanent Incremental Revolving Commitment reduction, Pari Passu Indebtedness (in the case of revolving loans, to the extent accompanied by a corresponding permanent commitment reduction) voluntarily prepaid, repaid, redeemed, repurchased or retired and any prepayment of Term Loans (including Incremental Term Loans, Extended Term Loans and Specified Refinancing Term Loans) pursuant to Subsection 4.4(l) or 11.6(h) (by the Borrower or its Restricted Subsidiaries) (provided that such deduction for prepayments pursuant to Subsection 4.4(l) or 11.6(h) (by the Borrower or its Restricted Subsidiaries) shall be limited to the actual cash amount of such prepayment), in each case during the period beginning with the day following the last day of such fiscal year and ending on the ECF Payment Date and stated by the Borrower as prepaid pursuant to this Subsection 4.4(e)(iii), (xv ) any ABL Facility Loans prepaid to the extent accompanied by a corresponding permanent commitment reduction under the ABL Facility during such fiscal year (which, in any event, shall not include any designated prepayment pursuant to clause (w), (x) or (y) below), (yw) the aggregate principal amount of ABL Facility Loans prepaid to the extent accompanied by a corresponding permanent commitment reduction under the ABL Facility during the period beginning with the day following the last day of such fiscal year and ending on the ECF Payment Date and stated by the Borrower as prepaid pursuant to this Subsection 4.4(e)(iii) (which, in any event, shall not include any designated prepayment pursuant to clause (x) or (y) below), (x) the aggregate principal amount of ABL Facility Loans prepaid during such fiscal year, in each case to the extent such amounts are drawn to fund any OID or upfront fees in respect of the Tranche B Term Loans or any Incremental Term Loans and stated by the Borrower as prepaid pursuant to this Subsection 4.4(e)(iii) (which, in any event, shall not include any designated prepayment pursuant to clause (y) below), (y) the aggregate principal amount of ABL Facility Loans prepaid during the period beginning with the day following the last day of such fiscal year and ending on the ECF Payment Date and stated by the Borrower as prepaid pursuant to this Subsection 4.4(e)(iii), in each case to the extent such amounts are drawn to fund any OID or upfront fees in respect of the Tranche B Term Loans or any Incremental Term Loans and stated by the Borrower as prepaid pursuant to this Subsection 4.4(e)(iii) and (z) at the Borrower’s election, without duplication of amounts deducted from Excess Cash Flow pursuant to this Subsection 4.4(e)(iii)(A)(2) in respect of prior fiscal years, the aggregate consideration required to be paid in cash by the Borrower or any of the Restricted Subsidiaries pursuant to binding contracts (the “Contract Consideration”) entered into prior to or during such fiscal year relating to Investments constituting “Permitted Investments” (other than Permitted Investments of the type described in clause (iii) of the definition thereof and intercompany Investments by and among the Borrower and its Restricted Subsidiaries) or made pursuant to Subsection 8.2 or Capital Expenditures to be consummated or made during the period of four consecutive Fiscal Quarters of the Borrower following the end of such fiscal year, provided that to the extent the aggregate amount of cash actually utilized to finance such Investments and Capital Expenditures during such period of four consecutive Fiscal Quarters is less than the Contract Consideration, the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such period of four consecutive Fiscal Quarters (provided that, except as otherwise specified herein, no prepayments made pursuant to the other clauses of this Subsection 4.4(e) shall be included in Subsection 4.4(e)(iii)(A)(2)(q), (r), (s), (t), (u), (v), (w), (x), (y) or (z)), in each case, excluding prepayments funded with proceeds from the

 

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Incurrence of long-term Indebtedness (unless, in the case of clause (u) or (v), such Indebtedness has been repaid) (the amount described in this clause (A), the “ECF Prepayment Amount”) minus (B) the portion of such ECF Prepayment Amount applied or offered (to the extent the Borrower or any of its Subsidiaries is required by the terms thereof) to prepay, repay or purchase Pari Passu Indebtedness on no more than a pro rata basis with the Term Loans; provided that such percentage in clause (1) above shall be reduced to 0% if the Consolidated Secured Leverage Ratio as of the last day of the immediately preceding fiscal year was less than 4.23.2 5:1.00, after giving pro forma effect to the applicable prepayment with the Applicable ECF Amount pursuant to this Subsection 4.4(e)(iii); provided, further that, with respect to any portion of the Applicable ECF Amount in excess of the portion required to achieve, on a pro forma basis, the Consolidated Secured Leverage Ratio threshold specified in the immediately foregoing proviso, such reduced percentage shall apply. Each prepayment of Original Initial Term Loans pursuant to this Subsection 4.4(e)(ii)(A), but not any other prepayment of Original Initial Term Loans pursuant to Subsection 4.4(e) made on or prior to the 6 month anniversary of the Closing Date in an amount equal to the Net Cash Proceeds received by the Borrower or any Restricted Subsidiary from its incurrence of new Indebtedness under first lien secured bank financing in a Repricing Transaction shall be accompanied by the payment of the fee required by Subsection 4.5(b)(i). Each prepayment of Tranche B Term Loans pursuant to this Subsection 4.4(e)(ii)(A), but not any other prepayment of Tranche B Term Loans pursuant to Subsection 4.4(e) made prior to the date that is six months after the First Amendment Effective Date in an amount equal to the Net Cash Proceeds received by the Borrower or any Restricted Subsidiary from its incurrence of new Indebtedness under first lien secured bank financing in a Repricing Transaction shall be accompanied by the payment of the fee required by Subsection 4.5(b)(ii). Nothing in this Subsection 4.4(e) shall limit the rights of the Agents and the Lenders set forth in Section 9.

(f) [Reserved].

(g) Subject to the last sentence of Subsection 4.4(h) and Subsection 4.4(k), each prepayment of Term Loans pursuant to Subsection 4.4(e) (other than a prepayment with the proceeds of Specified Refinancing Term Loans) shall be allocated pro rata among the Initial Term Loans, the Incremental Term Loans, the Extended Term Loans and the Specified Refinancing Term Loans; provided, that at the request of the Borrower, in lieu of such application on a pro rata basis among all Tranches of Term Loans, such prepayment may be applied to any Tranche of Term Loans so long as the maturity date of such Tranche of Term Loans precedes the maturity date of each other Tranche of Term Loans then outstanding or, in the event more than one Tranche of Term Loans shall have an identical maturity date that precedes the maturity date of each other Tranche of Term Loans then outstanding, to such Tranches on a pro rata basis. Each prepayment of Term Loans pursuant to Subsection 4.4(a) shall be applied within each applicable Tranche of Term Loans to the respective installments of principal thereof in the manner directed by the Borrower (or, if no such direction is given, in direct order of maturity). Each prepayment of Term Loans pursuant to Subsection 4.4(e) shall be applied within each applicable Tranche of Term Loans, first, to the accrued interest on the principal amount of Term Loans being prepaid and, second, to the respective installments of principal thereof in the manner directed by the Borrower (or, if no such direction is given in direct order of maturity). Notwithstanding any other provision of this Subsection 4.4, a Lender may, at its option, and if agreed by the Borrower, in connection with any prepayment of Term Loans pursuant to Subsection 4.4(a) or (e), exchange such Lender’s portion of the Term Loan to be prepaid for Rollover Indebtedness, in lieu of such Lender’s pro rata portion of such prepayment (and any such Term Loans so exchanged shall be deemed repaid for all purposes under the Loan Documents).

 

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(h) The Borrower shall give notice to the Administrative Agent of any mandatory prepayment of the Term Loans (x) pursuant to Subsection 4.4(e)(iii), three Business Days prior to the date on which such payment is due and (y) pursuant to any other provision of Subsection 4.4(e), promptly (and in any event within five Business Days) upon becoming obligated to make such prepayment. Such notice shall state that the Borrower is offering to make or will make such mandatory prepayment (i) in the case of mandatory prepayments pursuant to Subsection 4.4(e)(i), on or before the date specified in Subsection 8.4(b) and (ii) in the case of mandatory prepayments pursuant to any other clause of Subsection 4.4(e), on or before the date specified in such clause, as the case may be (each, a “Prepayment Date”). Subject to the following sentence, once given, such notice shall be irrevocable and all amounts subject to such notice shall be due and payable on the Prepayment Date (except as otherwise provided in the last sentence of this Subsection 4.4(h)). Any such notice of prepayment pursuant to Subsection 4.4(e) may state that such notice is conditioned upon the occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in which case such notice may be revoked or extended by the Borrower (by written notice to the Administrative Agent, on or prior to the specified effective date) if such condition is not satisfied or waived. Upon receipt by the Administrative Agent of such notice, the Administrative Agent shall immediately give notice to each Lender of the prepayment and the Prepayment Date. The Borrower (in its sole discretion) may give each Lender the option (in its sole discretion) to elect to decline any such prepayment (other than a prepayment pursuant to Subsection 4.4(e)(ii), except as otherwise provided for in the last sentence of Subsection 4.4(g)) by giving notice of such election in writing to the Administrative Agent by 11:00 A.M., New York City time, on the date that is three Business Days (or such shorter period as may be agreed by the Administrative Agent in its reasonable discretion) prior to the Prepayment Date. Upon receipt by the Administrative Agent of such notice, the Administrative Agent shall immediately notify the Borrower of such election. Any amount so declined by any Lender (the “Term Loan Declined Amount”) may, at the option of the Borrower, be applied to the payment or prepayment of Indebtedness, including any Junior Debt, or otherwise be retained by the Borrower and its Restricted Subsidiaries and/or applied by the Borrower or any of its Restricted Subsidiaries in any manner not inconsistent with this Agreement.

(i) Without limitation of Subsections 2.8 and 8.1(b)(i), amounts prepaid on account of Term Loans pursuant to Subsection 4.4(a), (e) or (l) may not be reborrowed.

(j) Notwithstanding the foregoing provisions of this Subsection 4.4, if at any time any prepayment of Loans pursuant to Subsection 4.4(a) or (e) would result, after giving effect to the procedures set forth in this Agreement, in the Borrower incurring breakage costs under Subsection 4.12 as a result of Eurodollar Loans being prepaid other than on the last day of an Interest Period with respect thereto, then, the Borrower may, so long as no Default or Event of Default shall have occurred and be continuing, in its sole discretion, initially (i) deposit a portion (up to 100.0%) of the amounts that otherwise would have been paid in respect of such Eurodollar Loans with the Administrative Agent (which deposit must be equal in amount to the amount of such Eurodollar Loans not immediately prepaid), to be held as security for the obligations of the

 

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Borrower to make such prepayment pursuant to a cash collateral agreement to be entered into on terms reasonably satisfactory to the Administrative Agent with such cash collateral to be directly applied upon the first occurrence thereafter of the last day of an Interest Period with respect to such Eurodollar Loans (or such earlier date or dates as shall be requested by the Borrower) or (ii) make a prepayment of Loans in accordance with Subsection 4.4(a) with an amount equal to a portion (up to 100.0%) of the amounts that otherwise would have been paid in respect of such Eurodollar Loans (which prepayment, together with any deposits pursuant to clause (i) above, must be equal in amount to the amount of such Eurodollar Loans not immediately prepaid); provided that, in the case of either clause (i) or (ii) above, such unpaid Eurodollar Loans shall continue to bear interest in accordance with Subsection 4.1 until such unpaid Eurodollar Loans or the related portion of such Eurodollar Loans, as the case may be, have or has been prepaid. In addition, if the Borrower determines in good faith, which determination shall be conclusive, that repatriating any amounts attributable to Foreign Subsidiaries that are required to be applied to prepay Term Loans pursuant to Subsection 4.4(e)(i) or 4.4(e)(iii) (x) would result in material adverse tax consequences to Management Holdings, Waterworks Holdings, Pubco, New Blocker, New Blocker Holdings, Blocker Holdings, Passthrough Holdings, Management Holdings, the BorrowerTopco or one of its Subsidiaries (or, at the election of the Borrower in connection with an initial public offering or other restructuring of the Borrower, any Parent Entity or IPO Vehicle, the Borrower or any of its Subsidiaries) or (y) (1) could reasonably be expected to be prohibited or delayed by or violate or conflict with applicable local law, (2) is restricted by applicable organizational documents or any agreement or, (3is subject to other organizational or administrative impediments from being repatriated to the United States or (4) conflicts with the fiduciary duties of the applicable directors, or result in, or could reasonably be expected to result in, a material risk of personal or criminal liability for any applicable officer, director or manager, then, in each case the Borrower shall not be required to prepay such amounts as required thereunder, and such amounts may be retained by the applicable Foreign Subsidiary; provided that, in the case of this clause (y), the Borrower shall take commercially reasonable actions to cause the applicable Foreign Subsidiary to take all actions reasonably required by the applicable local law, the applicable organizational documents or agreements, the applicable organizational impediments or other impediment to permit repatriation of the proceeds subject to such prepayments.

(k) Notwithstanding anything to the contrary herein, this Subsection 4.4 may be amended (and the Lenders hereby irrevocably authorize the Administrative Agent to enter into any such amendments) to the extent necessary to reflect differing amounts payable, and priorities of payments, to Lenders participating in any new classes or tranches of Term Loans added pursuant to Subsections 2.8, 2.10 and, 2.11 or 11.1(h), as applicable, or pursuant to any other credit or letter of credit facility added pursuant to Subsection 2.8 or 11.1(e).

(l) Notwithstanding anything in any Loan Document to the contrary, so long as no Event of Default under Subsection 9.1(a) or (f) has occurred and is continuing, the Borrower may prepay the outstanding Term Loans on the following basis:

(i) The Borrower shall have the right to make a voluntary prepayment of Term Loans at a discount to par (such prepayment, the “Discounted Term Loan Prepayment”) pursuant to a Borrower Offer of Specified Discount Prepayment, a Borrower Solicitation of Discount Range Prepayment Offers, or a Borrower Solicitation

 

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of Discounted Prepayment Offers, in each case made in accordance with this Subsection 4.4(l); provided that the Borrower shall not initiate any action under this Subsection 4.4(l) in order to make a Discounted Term Loan Prepayment unless (1) at least ten Business Days shall have passed since the consummation of the most recent Discounted Term Loan Prepayment as a result of a prepayment made by the Borrower on the applicable Discounted Prepayment Effective Date (or such shorter period as may be agreed to by the Administrative Agent in its reasonable discretion) or (2) at least three Business Days shall have passed since the date the Borrower was notified that no Lender was willing to accept any prepayment of any Term Loan at the Specified Discount, within the Discount Range or at any discount to par value, as applicable, or in the case of Borrower Solicitation of Discounted Prepayment Offers, the date of the Borrower’s election not to accept any Solicited Discounted Prepayment Offers made by a Lender (or such shorter period as may be agreed to by the Administrative Agent in its reasonable discretion). Each Lender participating in any Discounted Term Loan Prepayment acknowledges and agrees that in connection with such Discounted Term Loan Prepayment, (1) the Borrower then may have, and later may come into possession of, information regarding the Term Loans or the Loan Parties hereunder that is not known to such Lender and that may be material to a decision by such Lender to participate in such Discounted Term Loan Prepayment (“Excluded Information”), (2) such Lender has independently and, without reliance on any Holding CompanyParent Entity or IPO Vehicle, the Borrower, any of its Subsidiaries, the Administrative Agent or any of their respective Affiliates, has made its own analysis and determination to participate in such Discounted Term Loan Prepayment notwithstanding such Lender’s lack of knowledge of the Excluded Information and (3) none of the Holding CompaniesParent Entities or IPO Vehicles, the Borrower, its Subsidiaries, the Administrative Agent, or any of their respective Affiliates shall have any liability to such Lender, and such Lender hereby waives and releases, to the extent permitted by law, any claims such Lender may have against any Holding CompanyParent Entity or IPO Vehicle, the Borrower, its Subsidiaries, the Administrative Agent, and their respective Affiliates, under applicable laws or otherwise, with respect to the nondisclosure of the Excluded Information. Each Lender participating in any Discounted Term Loan Prepayment further acknowledges that the Excluded Information may not be available to the Administrative Agent or the other Lenders. Any Term Loans prepaid pursuant to this Subsection 4.4(l) shall be immediately and automatically cancelled.

(ii) Borrower Offer of Specified Discount Prepayment. (1) The Borrower may from time to time offer to make a Discounted Term Loan Prepayment by providing the Administrative Agent with three Business Days’ (or such shorter period as may be agreed by the Administrative Agent in its reasonable discretion) notice in the form of a Specified Discount Prepayment Notice; provided that (I) any such offer shall be made available, at the sole discretion of the Borrower, to each Lender or to each Lender with respect to any Tranche on an individual Tra