Download SIGNATURE GROUP HOLDINGS, INC. (Form: 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report: February 26, 2015
Signature Group Holdings, Inc.
Delaware
001-08007
46-3783818
(State or other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
15301 Ventura Boulevard, Suite 400
Sherman Oaks, California 91403
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (805) 435-1255
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of
the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry into a Material Definitive Agreement
Closing of Purchase and Sale Agreement
On February 27, 2015, Signature Group Holdings, Inc. (the “ Company ” or “ Signature ”) and its indirect wholly owned subsidiary, Real
Alloy Holding, Inc. (“ Real Alloy ” and formerly SGH Acquisition Holdco, Inc.), consummated the previously announced acquisition (the “
Real Alloy Acquisition ”) of the global recycling and specification alloys business (the “ Business ”) of Aleris Corporation (“ Aleris ”) pursuant
to the terms of a Purchase and Sale Agreement, dated October 17, 2014, amended on January 26, 2015 and further amended, as discussed
below, on February 26, 2015 (the “ Purchase Agreement ”), by and among the Company, Real Alloy and the Company’s indirect wholly owned
German subsidiary, Evergreen Holding Germany GmbH (“ Evergreen Holding ”, and collectively with Real Alloy, the “ Buyer ”), and Aleris,
Aleris International, Inc. (“ Aleris International ”), Aleris Holding Canada Limited, Aleris Aluminum Netherlands B.V., Aleris Deutschland
Holding GmbH, Dutch Aluminum C.V. and Aleris Deutschland Vier GmbH Co KG (collectively, the “ Sellers ”). Under the terms and
conditions of the Purchase Agreement, at the closing of the Real Alloy Acquisition (the “ Closing ”) Real Alloy and Evergreen Holding
acquired all of Aleris’ equity interests in Sellers and their subsidiaries (the “ Business Entities ”) that comprise the Business.
Real Alloy acquired the Business for a purchase price of $525 million (the “ Purchase Price ”), comprised of $500 million in cash and $25
million, or 25,000 shares, of Series B Non-Participating Preferred Stock of Signature (the “ Series B Preferred ”). In addition, Real Alloy
acquired $5.5 million of cash, and assumed $4.3 million of indebtedness, from the Business. The Company funded the cash portion of the
Purchase Price from: (i) cash on hand, (ii) a portion of the net proceeds of the Company’s January 2015 sale of North American Breaker Co.,
LLC, the Company’s indirect wholly owned subsidiary, (iii) the net proceeds of the Company’s $3 million October 2014 issuance of 300,000
shares of the Company’s common stock in a private placement, (iv) the net proceeds of the Company’s December 2014 $28.5 million
registered primary offering of common stock, (v) the net proceeds of the Company’s February 2015 $55 million stapled rights offering of
common stock upon the exercise of subscription rights (the “ Rights Offering ”), (vi) the net proceeds of the December 2014 private placement
of $305 million in senior secured notes (the “ Notes ”) by Real Alloy (who assumed the obligations of the Company’s indirect wholly owned
subsidiary, SGH Escrow Corporation (“ SGH Escrow ”) by merger upon the Real Alloy Acquisition) and (vii) $73.5 million in opening draws
on the combination of an asset-based lending facility (the “ Asset-Based Facility ”) provided by General Electric Capital Corporation (“ GE
Capital ”) and a German factoring facility (the “ Factoring Facility ”) provided by GE Capital Bank AG (“ GE Germany ”).
At the Closing, the 25,000 shares of Series B Preferred Stock and $5 million of the cash portion of the Purchase Price were placed into
escrow to satisfy the indemnification obligations of Aleris under the Purchase Agreement. As previously disclosed, Aleris has agreed to
indemnify Real Alloy and its affiliates for claims and losses arising out of or related to, among others: (i) breaches of representations,
warranties and covenants of Aleris and the Sellers, (ii) liability arising from retained business or the discontinued real property locations,
(iii) certain litigation matters, (iv) certain transaction expenses and (v) certain costs related to the closure or operation of the Business’ facility
in Goodyear, Arizona. Real Alloy has agreed to indemnify Aleris, the Sellers and their affiliates for claims and losses arising out of or related
to breaches of representations, warranties and covenants of the Buyer in the Purchase Agreement and liability arising in connection with the
operation of the Business following the Closing. Aleris’ aggregate indemnity obligations related to breaches of representations, warranties and
covenants are generally capped at $67 million, except for certain fundamental representations, and representations related to taxes and Title IV
of ERISA, which are subject to a cap equal to the Purchase Price. In general, Aleris will not be required to pay any amounts in respect of its
indemnification obligations until the aggregate amount of all losses exceeds a deductible of $3 million, in which case Aleris will be required to
indemnify only for such losses in excess of the deductible. The deductible will not apply to losses to the extent such losses arise from or relate
to certain fundamental representations, taxes or Title IV of ERISA. In addition, certain scheduled environmental matters are subject to a
deductible of approximately $23.9 million.
In connection with the Closing, Real Alloy and Aleris International entered into a transition services agreement, under which Aleris
International will provide certain customary post-closing transition services, including information technology services, treasury services,
accounts payable, cash management and payroll, credit/collection services, environmental services and human resource services, to Real Alloy,
for periods ranging from three to 24 months following Closing.
In connection with the completion of the Real Alloy Acquisition, the Company issued a press release on February 27, 2015, a copy of
which is attached hereto as Exhibit 99.1 and which is incorporated herein by reference.
Second Amendment to Purchase and Sale Agreement
On February 26, 2015, the Company and Aleris entered into Amendment No. 2 to the Purchase Agreement (the “ Amendment ”), to
provide for the payment by Real Alloy to Aleris of the amount that the Preliminary Net Working Capital (as defined in the Purchase
Agreement) exceeds the Target Net Working Capital (as defined in the Purchase Agreement), or, as the case may be, by Aleris to Real Alloy of
the amount that the Target Net Working Capital exceeds the Preliminary Net Working Capital on the sixtieth (60 th ) day following Closing
(rather than as an adjustment to the Purchase Price at Closing), if the parties have not finally determined the Final Closing Statement (as
defined in the Purchase Agreement) as of such sixtieth day.
The foregoing description of the Amendment does not purport to be complete and is qualified by reference in its entirety to the full text of
the Amendment, a copy of which attached hereto as Exhibit 2.1 and is incorporated into this Item 1.01 by reference.
Notes Escrow Release
As previously disclosed by the Company in a Current Report on Form 8-K filed on January 12, 2015, on January 8, 2015, SGH Escrow,
an indirect wholly owned subsidiary of the Company that was merged with and into Real Alloy upon the Closing, completed an offering of
$305.0 million aggregate principal amount of its 10% Senior Secured Notes due 2019 in a private offering (the “ Notes Offering ”) to qualified
institutional purchasers in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “ Securities Act ”).
The Notes were issued pursuant to an indenture, dated as of January 8, 2015 (the “ Indenture ”) between SGH Escrow, Real Alloy Intermediate
Holding, LLC, a direct wholly owned subsidiary of Signature and the direct parent of SGH Escrow (“ Real Alloy Parent ”), and Wilmington
Trust, National Association, as trustee and notes collateral trustee (the “ Trustee ”). SGH Escrow consummated the Notes Offering on
January 8, 2015 and deposited the proceeds of such Notes Offering into escrow pending the Closing of the Real Alloy Acquisition and other
conditions, including the merger of SGH Escrow with and into Real Alloy with Real Alloy as the surviving corporation, the assumption by
Real Alloy of all of the obligations of SGH Escrow under the Notes and the Indenture, and Real Alloy Parent and other current and future
domestic subsidiary guarantors (the “ Subsidiary Guarantors ”) providing guarantees of Real Alloy’s obligations under the Notes and the
Indenture.
On February 27, 2015, in connection with the Closing of the Real Alloy Acquisition, the remaining conditions to the release of the funds
from escrow were satisfied. Real Alloy, Real Alloy Parent, the Subsidiary Guarantors, and the Trustee entered into a First Supplemental
Indenture with respect to the Notes (including the Guarantee therein) (the “ Supplemental Indenture ”), pursuant to which Real Alloy assumed
all of the obligations of SGH Escrow under the Notes and the Indenture and Real Alloy Parent and the Subsidiary Guarantors guaranteed the
Notes. On February 27, 2015, the proceeds of the Notes were released from escrow and were used to pay a portion of the Purchase Price.
Under the terms of the Pledge and Security Agreement, dated as of February 27, 2015, by and between each of Real Alloy, Real Alloy
Parent and the other parties signatory thereto and Wilmington Trust, National Association as notes collateral trustee (the “ Notes Collateral
Trustee ”), the Notes and related guarantees are secured by first priority security interests in the fixed assets of Real Alloy, Real Alloy Parent
and the Subsidiary Guarantors and by second priority security interests in certain other collateral of Real Alloy, Real Alloy Parent and the
Subsidiary Guarantors. Beyond Real Alloy’s assumption of the obligations of SGH Escrow and Real Alloy Parent and the Subsidiary
Guarantors’ guarantee of the Notes, the Supplemental Indenture does not materially amend the Indenture. More information on the terms of the
Indenture was provided in response to Item 1.01 to the Company’s Current Report on Form 8-K filed on January 12, 2015, and the Indenture
was filed as Exhibit 4.1 to such Current Report.
The foregoing descriptions of the Supplemental Indenture and Pledge and Security Agreement do not purport to be complete and are
qualified in its entirety by the copy of such documents filed as Exhibit 4.1 and 10.1, respectively, to this Current Report and incorporated into
this Item 1.01 by reference. Further, the replacement Form of Rule 144A 10% Senior Secured Note due 2019 and replacement Form of
Regulation S 10% Senior Secured Note due 2019 are filed as Exhibits 4.2 and 4.3, respectively, to this Current Report and are incorporated into
this Item 1.01 by reference.
Asset–Based Facility and Intercreditor Agreement
On February 27, 2015, Real Alloy Recycling, Inc. (“ RA Recycling ,” a subsidiary of Real Alloy and formerly known as Aleris
Recycling, Inc.) for itself and as representative of other borrowers, and Real Alloy Canada Ltd. (“ RA Canada ,” an affiliate of Real Alloy and
formerly known as Aleris Specification Alloy Products Canada Company) entered into a Revolving Credit Agreement with GE Capital, for
itself as a lender, letter of credit issuer, and swingline lender and as agent for all lenders and Wintrust Bank, as a lender (the “ Revolving Credit
Agreement ”), that provides a $110 million senior secured revolving asset-based credit facility. Under the Asset Based Facility, GE Capital has
committed to lend $95 million, and Wintrust Bank has committed to lend $15 million.
A portion of the proceeds of the Asset-Based Facility were used to fund the Purchase Price, and additional proceeds of the Asset-Based
Facility will be used for working capital and general corporate purposes. GE Capital may syndicate the Asset-Based Facility to additional
lenders.
The Asset-Based Facility is divided into two sub-facilities, a U.S. sub-facility (the “ US Subfacility ”), which includes an $11 million
swing line sub-facility, and a Canadian sub-facility (the “ Canadian Subfacility ”). The Asset-Based Facility also includes a $25 million letter
of credit sub-facility, of which $5 million can be used for letters of credit for RA Canada. The borrowing base under the Asset Based Facility
will be determined based on eligible accounts receivable and eligible inventory of the Business Entities formed in the United States (the “ US
Borrowers ”) (in the case of the US Subfacility) and eligible accounts receivable and eligible inventory of the Business Entities formed in
Canada (the “ Canadian Borrowers ”) (in the case of the Canadian Subfacility).
US dollar denominated loans under the US Subfacility will bear interest, at the US Borrowers’ option, either (i) at 1, 2, 3 or 6-month
interest periods at LIBOR, or (ii) the Base Rate (as defined below), in each case plus a margin based on the amount of the excess availability
under the Asset Based Facility. The “ Base Rate ” is equal to the greater of (a) the US Prime Rate (as defined in the Revolving Credit
Agreement) , (b) the US Federal Funds Rate plus 50 basis points, and (c) the sum of LIBOR plus a margin based on the amount of the excess
availability under the Asset Based Facility. Canadian dollar denominated loans under the Canadian Subfacility will bear interest, at the
Canadian Borrowers’ option, either (i) at 1, 2, 3 or 6-month interest periods at an average Canadian interbank rate, or (ii) floating at the greater
of the Canadian prime rate or the average
30-day Canadian interbank rate plus 1.35%, in each case plus a margin based on the amount of the excess availability under the Asset Based
Facility. Events of default will trigger an increase of 2.0% in all interest rates. Interest will be payable monthly in arrears, except for LIBOR
loans and Canadian interbank rate loans, for which interest will be payable at the end of each relevant interest period. Additionally, at Closing,
the US and Canadian Borrowers paid a 1% funding fee.
The Asset-Based Facility expires on February 27, 2019.
As provided in the U.S. Revolving Guarantee and Security Agreement, dated as of February 27, 2015, by and among RA Recycling, each
other U.S. borrower and guarantor thereunder from time to time, and GE Capital, as agent (the “ Revolving Guaranty and Security Agreement
”), and the Canadian Revolving Guarantee and Security Agreement, dated as of February 27, 2015, by and among RA Canada, each other
guarantor thereunder from time to time, and GE Capital, as agent (the “ Canadian Revolving Guaranty and Security Agreement ”), the
Asset-Based Facility is secured by a first priority lien on the following assets of the U.S.-based Business Entities, the Canadian-based Business
Entities, and certain of their domestic and (to the extent no adverse tax impact would be incurred) foreign subsidiaries: accounts receivable,
inventory, instruments representing receivables, guarantees and other credit enhancements related to receivables, and bank accounts into which
receivables are deposited (to the extent no adverse tax impact would be incurred), among other related assets (collectively, the “ ABL Secured
Assets ”). The Asset-Based Facility is also secured by a second-priority lien on the assets that secure the Notes (the “ Notes Secured Assets ”).
In addition, on February 27, 2015, in connection with the Revolving Credit Agreement and the Indenture, as supplemented by the
Supplemental Indenture, GE Capital, as agent for holders of the obligations under the Revolving Credit Agreement, and the Notes Collateral
Trustee entered into an Intercreditor Agreement (the “ Intercreditor Agreement ”), which was acknowledged and agreed to by Real Alloy
Parent, Real Alloy, and the grantors listed on the signature page thereto (collectively, the “ Borrowers ”). Under the Intercreditor Agreement,
GE Capital and the Notes Collateral Trustee established their respective priorities to certain collateral of the Borrowers that secure borrowings
under the Indenture and the Revolving Credit Agreement. Under the Intercreditor Agreement, the Notes Collateral Trustee has a first priority
security interest in, and GE Capital has a second priority security interest in, the Notes Secured Assets. Conversely, GE Capital has a first
priority security interest in, and the Notes Collateral Trustee has a second priority security interest in, the ABL Secured Assets.
The foregoing descriptions of the Revolving Credit Agreement, Revolving Guaranty and Security Agreement, Canadian Revolving
Guaranty and Security Agreement and Intercreditor Agreement do not purport to be complete and are qualified in their entirety by the copies of
such documents filed as Exhibits 10.2, 10.3, 10.4 and 10.5 respectively, to this report and are incorporated into this Item 1.01 by reference.
Factoring Facility
Also on February 27, 2015, Aleris Recycling (German Works GmbH), a German affiliate of Real Alloy (“ RA Germany ”), entered into a
factoring agreement with GE Germany providing a nonrecourse factoring facility to RA Germany with a maximum financing amount of
€50 million.
A portion of the proceeds of the Factoring Facility were used to fund the Purchase Price, additional proceeds of the Factoring Facility will
be used to satisfy RA Germany’s obligations with respect to its customers, and any additional proceeds will be used to provide for working
capital and general corporate purposes.
The Factoring Facility provides for purchases by GE Germany of eligible receivables from RA Germany, which are subject to certain
limitations and eligibility requirements to be determined in the reasonable discretion of GE Germany based on the relevant account debtor
creditworthiness and reliability.
Receivables will be purchased at a 15% discount to their face value. The Factoring Facility expires on January 15, 2019. The interest rate
applicable to the Factoring Facility is the three-month EURIBOR (daily rate) fixed on the last business day of a month for the following month,
plus 1.65%. The initial interest rate would have been 1.686% for February 2015. Factoring and administrative fees also apply.
The foregoing description of the Factoring Agreement does not purport to be complete and is qualified in its entirety by the copy of such
document filed as Exhibit 10.6 to this report and is incorporated into this Item 1.01 by reference.
Item 2.01
Completion of Acquisition or Disposition of Assets
The information set forth in Item 1.01 above under the caption “Closing of Purchase and Sale Agreement” is incorporated by reference in
response to this Item 2.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 above under the captions “Notes Escrow Release,” “Asset–Based Facility and Intercreditor
Agreement” and “Factoring Facility” is incorporated by reference in response to this Item 2.03.
Item 3.02
Unregistered Sales of Equity Securities
As discussed above, pursuant to the Purchase Agreement, the Company issued 25,000 unregistered shares of Series B Preferred Stock, at
$1,000 per share, to Aleris as a portion of the Purchase Price for the Real Alloy Acquisition. The issuance was made in a private, unregistered
offering pursuant to Section 4(a)(2) under the Securities Act. These shares will be held in escrow to satisfy the indemnity obligations of the
Sellers under the Purchase Agreement.
A description of the Purchase Agreement is set forth above in response to Item 1.01, and a description of the Certificate of Designation
for the Series B Preferred Stock (the “ Certificate of Designation ”) is set forth below in Item 5.03, and each is incorporated by reference in
response to this Item 3.02.
Item 3.03
Material Modification of Rights of Security Holders
Pursuant to the terms of the Certificate of Designation , the Company is prohibited from declaring or paying dividends on the Company’s
common stock for two years without the consent of a majority of the holders of the Series B Preferred and, thereafter, if the Company is not
current in its dividend payments to the holders of Series B Preferred. A description of the Series B Preferred is set forth below in Item 5.03 and
is incorporated by reference in response to this Item 3.03.
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
In connection with the shares of Series B Preferred Stock issued to Aleris as a portion of the Purchase Price, the Board has designated
100,000 shares of the Company’s authorized but unissued capital stock as “Series B Non-Participating Preferred Stock.” The Company filed
the Certificate of Designation with the Secretary of State of the State of Delaware, effective February 27, 2015.
The Certificate of Designation provides that the initial series of Series B Preferred Stock will be 100,000 shares, but may be increased or
decreased (but not below the then-outstanding number of shares of Series B Preferred Stock) by the Board in accordance the Company’s
Certificate of Incorporation and applicable law. Shares of Series B Preferred Stock that the Company redeems or otherwise purchases will be
available for reissuance as Series B Preferred Stock or other series of preferred stock that may be created by the Board. The Series B Preferred
Stock will rank senior to the Company’s common stock and Series A Preferred Stock upon a voluntary or involuntary liquidation, dissolution
or winding up.
The Series B Preferred Stock will pay quarterly dividends at a rate of 7% for the first 18 months after the date of issuance, 8% for the
next 12 months, and 9% thereafter. Dividends will be paid in kind for the first two years, and thereafter will be paid in cash. All accrued and
accumulated dividends on the Series B Preferred Stock will be prior and in preference to any dividend on any of the Company’s common stock
or other junior securities. Any such dividends shall be fully declared and paid before any dividends are declared and paid, or any other
distributions or redemptions are made, on the Company’s common stock or other junior securities, other than to declare or pay any dividend or
distribution payable on the common stock in shares of common stock.
The shares of Series B Preferred Stock will be generally non-voting, however the consent of the holders of a majority of the outstanding
shares of Series B Preferred Stock are required, among other requirements, (i) until the second anniversary of issuance, to (x) declare or pay
cash dividends on the common stock, or (y) purchase, redeem or acquire shares of the common stock, other than, among others, certain shares
of common stock issued to employees, (ii) so long as at least $10 million in aggregate principal amount of Series B Preferred Stock is
outstanding, to make acquisitions valued at more than 5% of the consolidated assets of the Company and its subsidiaries, (iii) to take actions
that would adversely affect the rights of the holders of the Series B Preferred Stock, and (iv) to undertake certain merger activities unless the
Series B Preferred Stock remains outstanding or is purchased at the liquidation preference.
The Company may generally redeem the shares of Series B Preferred Stock at any time at the liquidation preference, and the holders may
require the Company to redeem their shares of Series B Preferred Stock at the liquidation preference upon a change of control under the Notes
(or any debt facility that replaces or redeems the Notes) to the extent that the change of control does not provide for such redemption at the
liquidation preference. A holder of Series B Preferred Stock may require the Company to redeem all, but not less than all, of such holder’s
Series B Preferred Stock after sixty-six months following Closing. In addition, the Company may redeem shares of Series B Preferred Stock to
the extent Aleris is required to indemnify the Company under the Purchase Agreement. The Series B Preferred Stock held by Aleris and its
subsidiaries having a liquidation preference of $30 million is not transferrable (other than to another subsidiary of Aleris) for 18 months
following issuance (or such longer period in connection with any ongoing indemnity claims under the Purchase Agreement).
The Series B Preferred Stock does not have rights to convert into shares of the Company’s common stock or any other Company security.
Further, the Series B Preferred Stock does not have any rights of preemption as to any Company securities.
The foregoing description of the Certificate of Designation does not purport to be complete and is qualified by reference in its entirety to
the full text of the Certificate of Designation, a copy of which is attached hereto as Exhibit 3.1 and is incorporated into this Item 5.03 by
reference. Further, a copy of the Form of Series B Preferred Stock Certificate is attached hereto as Exhibit 4.4 and is incorporated into this
Item 5.03 by reference.
Item 8.01.
Other Events
Closing of Rights Offering
As previously disclosed, the closing of the Company’s Rights Offering was conditioned upon the Closing of the Real Alloy Acquisition.
The Rights Offering expired on February 20, 2015 with respect to the holders of common stock, and following the Closing of the Real Alloy
Acquisition on February 27, 2015, the Company issued the maximum offering of 9,751,773 shares to subscribing holders in respect of their
7,899,215
validly exercised basic subscription rights and 1,852,558 fulfilled oversubscription requests. The Board allocated the oversubscription shares
on a pro rata basis to the holders of common stock who validly exercised oversubscription rights, based on such holders’ common stock
ownership prior to exercising subscription rights and up to the level of subscription payments received from such holders.
As the Company raised the maximum $55 million in the Rights Offering, the Company did not draw on the backstop arrangements with
Aleris or Zell Credit Opportunities Master Fund L.P. (“ ZCOF ”) and the funds managed by another institutional investor.
THE RIGHTS OFFERING REMAINS OUTSTANDING WITH RESPECT TO THE HOLDERS OF THE COMPANY’S WARRANTS TO
PURCHASE COMMON STOCK AND IS BEING MADE ONLY BY MEANS OF THE PROSPECTUS SUPPLEMENT, DATED
JANUARY 29, 2015. THIS CURRENT REPORT ON FORM 8-K SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF SIGNATURE GROUP HOLDINGS, INC., NOR SHALL THERE BE
ANY OFFER, SOLICITATION OR SALE OF SECURITIES IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE. ANY SUCH OFFER, SOLICITATION OR SALE WILL BE MADE IN COMPLIANCE WITH ALL
APPLICABLE SECURITIES LAWS. THE COMMISSIONER OF BUSINESS OVERSIGHT OF THE STATE OF CALIFORNIA
DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES.
Approval of 4.9% Stockholder Purchases
In connection with the Rights Offering, the Board of Directors of the Company (the “ Board ”) approved the acquisitions by two common
stockholders, Hotchkis & Wiley Capital Management, an investment manager (“ H&W ”), and ZCOF of shares in the Rights Offering. Prior to
the Rights Offering, each of H&W and ZCOF owned in excess of 4.9% of the Company’s current outstanding common stock. H&W validly
exercised basic subscription rights and an oversubscription request in the Rights Offering (the “ H&W Subscription ”), and ZCOF validly
exercised basic subscription rights in the Rights Offering (the “ ZCOF Subscription ”).
Such approval relates to the provisions of the Company’s Second Amended and Restated Bylaws (the “ Bylaws ”) and the Rights
Agreement, dated as of October 23, 2007, between the Company and Mellon Investor Services LLC, as amended (the “ Rights Agreement ”).
Under the Bylaws, unless the Board has approved such transaction, an entity which owns 4.9% or greater of the Company’s common stock is
generally prohibited from acquiring additional shares. Further, under the Rights Agreement, an entity that acquires beneficial ownership of 5%
or more of the Company’s outstanding common stock may be deemed by the Board to be an Acquiring Person (as defined in the Rights
Agreement), which determination would trigger the rights under the Rights Agreement to purchase shares of Series A Preferred Stock.
As a result of the Board approval, the Board has approved the H&W Subscription and ZCOF Subscription for purposes of the Bylaws and
has affirmed that it will deem neither H&W nor ZCOF to be an Acquiring Person under the Rights Agreement.
Item 9.01
Financial Statements and Exhibits.
a)
Financial Statements of Businesses Acquired
The financial statements for the Real Alloy Acquisition required by this Item 9.01 are not included in this Current Report on Form 8-K. In
accordance with SEC rules, the Company will file such financial statements by amendment to this Current Report on Form 8-K not later than
71 calendar days after the date this initial Current Report is required to be filed.
b)
Pro Forma Financial Information
The pro forma financial information for the Real Alloy Acquisition required by this Item 9.01 are not included in this Current Report on
Form 8-K. In accordance with SEC rules, the Company will file such pro forma financial information by amendment to this Current Report on
Form 8-K not later than 71 calendar days after the date this initial Current Report is required to be filed.
d)
Exhibits
The following are filed as exhibits to this Current Report on Form 8-K.
Exhibit
No.
Description
2.1
Amendment No. 2 to Purchase and Sale Agreement, dated as of February 26, 2015, by and among Aleris Corporation and Real
Alloy Holding, Inc.
3.1
Certificate of Designation of Series B Non-Participating Preferred Stock of Signature Group Holdings, Inc.
4.1
First Supplemental Indenture, dated as of February 27, 2015, by and among Real Alloy Holding, Inc., Real Alloy Intermediate
Holding, LLC, each of the guarantors listed on the signature pages thereto, and Wilmington Trust, National Association (as
trustee and notes collateral trustee).
4.2
Form of Rule 144A 10% Senior Secured Note due 2019.
4.3
Form of Regulation S 10% Senior Secured Note due 2019.
4.4
Form of Series B Preferred Stock Certificate.
10.1
Pledge and Security Agreement, dated as of February 27, 2015, by and among each of the grantor parties listed on the signature
page thereto and Wilmington Trust, National Association (as notes collateral trustee).
10.2
Revolving Credit Agreement, dated as of February 27, 2015, by and among Real Alloy Recycling, Inc. (formerly known as
Aleris Recycling, Inc.) for itself and as representative of other borrowers, Real Alloy Canada Ltd. (formerly known as Aleris
Specification Alloy Products Canada Company), General Electric Capital Corporation, for itself as a lender, letter of credit
issuer, and swingline lender and as agent for all lenders, and Wintrust Bank, as a lender.
10.3
U.S. Revolving Guarantee and Security Agreement, dated as of February 27, 2015, by and among Real Alloy Recycling, Inc.
(formerly known as Aleris Recycling, Inc.), each other U.S. borrower and grantor thereunder from time to time, and General
Electric Capital Corporation, as agent.
10.4
Canadian Revolving Guarantee and Security Agreement, dated as of February 27, 2015, by and among Real Alloy Canada Ltd.
(formerly known as Aleris Specification Alloy Products Canada Company), each other grantor thereunder from time to time,
and General Electric Capital Corporation, as agent.
10.5
Intercreditor Agreement, dated as of February 27, 2015, by and among General Electric Capital Corporation, as North America
ABL Agent, and Wilmington Trust, National Association, as Notes Collateral Trustee, and acknowledged and agreed to by Real
Alloy Intermediate Holding, LLC, Real Alloy Holding, Inc.
10.6
Factoring Agreement, dated as of February 27, 2015, by and between GE Capital Bank AG and Aleris Recycling (German
Works) GmbH.
99.1
Signature Group Holdings, Inc. Press Release dated February 27, 2015.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SIGNATURE GROUP HOLDINGS, INC.
Date: March 4, 2015
By:
Name:
Title:
/s/ W. CHRISTOPHER MANDERSON
W. Christopher Manderson
Executive Vice President,
General Counsel and Secretary
INDEX TO EXHIBITS
Exhibit
No.
Description
2.1
Amendment No. 2 to Purchase and Sale Agreement, dated as of February 26, 2015, by and among Aleris Corporation and Real
Alloy Holding, Inc.
3.1
Certificate of Designation of Series B Non-Participating Preferred Stock of Signature Group Holdings, Inc.
4.1
First Supplemental Indenture, dated as of February 27, 2015, by and among Real Alloy Holding, Inc., Real Alloy Intermediate
Holding, LLC, each of the guarantors listed on the signature pages thereto, and Wilmington Trust, National Association (as
trustee and notes collateral trustee).
4.2
Form of Rule 144A 10% Senior Secured Note due 2019.
4.3
Form of Regulation S 10% Senior Secured Note due 2019.
4.4
Form of Series B Preferred Stock Certificate.
10.1
Pledge and Security Agreement, dated as of February 27, 2015, by and among each of the grantor parties listed on the signature
page thereto and Wilmington Trust, National Association (as notes collateral trustee).
10.2
Revolving Credit Agreement, dated as of February 27, 2015, by and among Real Alloy Recycling, Inc. (formerly known as
Aleris Recycling, Inc.) for itself and as representative of other borrowers, Real Alloy Canada Ltd. (formerly known as Aleris
Specification Alloy Products Canada Company), General Electric Capital Corporation, for itself as a lender, letter of credit
issuer, and swingline lender and as agent for all lenders, and Wintrust Bank, as a lender.
10.3
U.S. Revolving Guarantee and Security Agreement, dated as of February 27, 2015, by and among Real Alloy Recycling, Inc.
(formerly known as Aleris Recycling, Inc.), each other U.S. borrower and grantor thereunder from time to time, and General
Electric Capital Corporation, as agent.
10.4
Canadian Revolving Guarantee and Security Agreement, dated as of February 27, 2015, by and among Real Alloy Canada Ltd.
(formerly known as Aleris Specification Alloy Products Canada Company), each other grantor thereunder from time to time, and
General Electric Capital Corporation, as agent.
10.5
Intercreditor Agreement, dated as of February 27, 2015, by and among General Electric Capital Corporation, as North America
ABL Agent, and Wilmington Trust, National Association, as Notes Collateral Trustee, and acknowledged and agreed to by Real
Alloy Intermediate Holding, LLC, Real Alloy Holding, Inc.
10.6
Factoring Agreement, dated as of February 27, 2015, by and between GE Capital Bank AG and Aleris Recycling (German
Works) GmbH.
99.1
Signature Group Holdings, Inc. Press Release dated February 27, 2015.
Exhibit 2.1
EXECUTION VERSION
AMENDMENT NO. 2 TO PURCHASE AND SALE AGREEMENT
This AMENDMENT NO. 2 TO PURCHASE AND SALE AGREEMENT (this “ Amendment ”) is dated as of February 26, 2015, by
and among Aleris Corporation, a Delaware corporation (“ Parent ”), and Real Alloy Holding, Inc. (f/k/a SGH Acquisition Holdco, Inc.), a
Delaware corporation (“ Buyer ”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in
the Agreement (as defined below).
RECITALS
WHEREAS, Parent, Buyer, Aleris International, Inc., Aleris Holding Canada Limited, Aleris Aluminum Netherlands B.V., Aleris
Deutschland Holding GmbH, Dutch Aluminum C.V., Aleris Deutschland Vier GmbH Co KG, Evergreen Holding Germany GmbH and
Signature Group Holdings, Inc. previously entered into a Purchase and Sale Agreement, dated as of October 17, 2014, as amended by that
certain Amendment No. 1 to Purchase and Sale Agreement, dated January 26, 2015, by and among Parent and Buyer (as amended, the “
Agreement ”);
WHEREAS, Section 11.02(a) of the Agreement provides in relevant part that the Agreement can be amended only by an instrument in
writing signed by Parent and Buyer; and
WHEREAS, Parent and Buyer have agreed to amend the Agreement as provided herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in
this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE I
AMENDMENTS TO AGREEMENT
1.1. All references in the Agreement and this Amendment to the “Agreement” shall be deemed to mean the Agreement, as amended
by this Amendment.
1.2. Section 2.05(b) of the Agreement is hereby amended and restated in its entirety to read as follows:
“The cash Purchase Price to be paid in accordance with Section 2.05(c) (the “ Preliminary Cash Purchase Price ”) shall equal: (i) Four
Hundred Ninety Five Million Dollars ($495,000,000.00), plus (ii) Closing Date Cash reflected on the Preliminary Closing Statement,
minus (iii) the excess (if any) of the Target Net Working Capital over the Preliminary Net Working Capital, plus (iv) the excess (if any)
of the Preliminary Net Working Capital over the Target Net Working Capital, minus (v) Closing Date Indebtedness reflected on the
Preliminary Closing Statement, minus (vi) Transaction Expenses set forth in the Preliminary Closing Statement.”
1.3. Section 2.05(c) of the Agreement is hereby amended and restated in its entirety to read as follows:
“The Preliminary Cash Purchase Price shall be paid by Buyer at the Closing to the Sellers in accordance with written instructions
delivered to Buyer at least two (2) Business Days prior to the Closing; provided that any amounts in respect of clauses (iii) or (iv) of
Section 2.05(b) shall not be included in the calculation of Preliminary Cash Purchase Price for the purposes of determining the amount to
be paid by Buyer at the Closing pursuant to this Section 2.05(c) and shall instead be paid in accordance with Section 2.05(d).”
1.4. The following new Section 2.05(d) is hereby added to the Agreement immediately following Section 2.05(c) of the Agreement:
“If the Final Closing Statement has not been finally determined by the Parties in accordance with Section 2.06 by the date that is sixty
(60) days after the Closing Date, on such date:
(i) if the Preliminary Net Working Capital exceeds the Target Net Working Capital, Buyer shall pay (or cause to be paid) to Parent
the amount of such excess, by wire transfer of immediately available funds in accordance with written instructions delivered by Parent to
Buyer; and
(ii) if the Target Net Working Capital exceeds the Preliminary Net Working Capital, Parent shall pay (or cause to be paid) to Buyer
the amount of such excess, by wire transfer of immediately available funds in accordance with written instructions delivered by Buyer to
Parent.”
1.5. Section 7.01(a) of the Agreement is hereby amended and restated in its entirety to read as follows:
“Subject in each case to all applicable Laws and the provisions of any Bargaining Agreement, effective no later than immediately prior to
the Closing, Parent shall cause all Business Employees to be employed by a Business Entity.”
1.6. Section 7.01(b) of the Agreement is hereby amended and restated in its entirety to read as follows:
For the one-year period following the Closing Date or such longer period as may be required by applicable Law or Contract, the Business
Entities shall provide the Business Employees with (i) compensation, including base salary, that is at least equal to the compensation,
including base salary, that is in effect for Business Employees immediately prior to the Closing and (ii) benefits that are substantially
comparable in the aggregate to the compensation and benefits provided to such Business Employees immediately prior to Closing;
provided , that for purposes of determining comparability, any retention bonuses, severance agreements or arrangements of the type
provided under the Severance Arrangements and de minimis fringe benefits shall be disregarded, and provided further that comparable
compensation and benefits for these purposes shall not include any equity compensation plans, programs or opportunities.
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1.7. The first sentence of Section 7.01(d) of the Agreement is hereby amended and restated in its entirety to read as follows:
“Notwithstanding Section 7.01(b) , in no event shall Buyer or, following the Closing, any Business Entity have any liability under
the Severance Arrangements; provided , however , to the extent the employment of any Business Employee is terminated by Buyer
or any Business Entity within twelve (12) months after the Closing such that a severance or termination payment would be due to
such Business Employee under a Severance Arrangement, Buyer shall not, and shall cause the Business Entities to not, except as
required by Law, re-hire any such Business Employee within six (6) months of the date of such Business Employee’s termination of
employment.”
ARTICLE II
MISCELLANEOUS
2.1. Effect of Amendment . Except as and to the extent expressly modified by this Amendment, the Agreement shall remain in full
force and effect in all respects.
2.2. Counterparts; Effectiveness . This Amendment may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective
when each party hereto shall have received a counterpart hereof signed by the other party hereto. Until and unless each party hereto has
received a counterpart hereof signed by the other party hereto, this Amendment shall have no effect and neither party hereto shall have any
right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). The exchange of a fully
executed Amendment (in counterparts or otherwise) by electronic transmission in .PDF or other equivalent format or by facsimile shall be
sufficient to bind the parties hereto to the terms and conditions of this Agreement.
2.3. Governing Law; Jurisdiction; WAIVER OF JURY TRIAL.
(a) This Amendment, and all Actions (whether in contract or tort) that may be based upon, arise out of or relate to this
Amendment or the negotiation, execution or performance hereof (including any claim or cause of action based upon, arising out of or related to
any representation or warranty made in or in connection with this Amendment or as an inducement to enter into this Amendment), shall be
governed by and construed in accordance with the law of the State of New York, without regard to the choice of law or conflicts of law
principles thereof that could cause the application of the laws of another state or jurisdiction. The parties hereto expressly waive any right they
may have, now or in the future, to demand or seek the application of a governing law other than the law of the State of New York.
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(b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the United States District Court sitting in the State of New York located in New York County or, if such courts shall not have
jurisdiction, the state courts sitting in the State of New York in New York County, and any appellate court from any appeal thereof, in any
Action arising out of or relating to this Amendment or the transactions contemplated hereby or for recognition or enforcement of any judgment
relating thereto, and each of the parties hereby irrevocably and unconditionally (i) agrees not to commence any such Action except in such
courts, (ii) agrees that any claim in respect of any such Action may be heard and determined in such state courts or, to the extent permitted by
Law, in such federal court, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any such Action in such state courts or such federal court and (iv) waives, to the fullest extent permitted by Law,
the defense of an inconvenient forum to the maintenance of such Action in such state courts or such federal court. Each of the Parties agrees
that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by Law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 11.01 of the
Agreement. Nothing in this Amendment will affect the right of any party to this Amendment to serve process in any other manner permitted by
Law.
(c) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AMENDMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY AND (IV) IT HAS
BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 2.3(c) .
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment effective as of the date first above written.
BUYER:
REAL ALLOY HOLDING, INC.
By: /s/ Kyle Ross
Name: Kyle Ross
Title: Vice President and Assistant Secretary
[Signature Page to Amendment No. 2 to Purchase and Sale Agreement ]
PARENT:
ALERIS CORPORATION
By:
/s/ Eric M. Rychel
Name: Eric M. Rychel
Title: EVP and CFO
[ Signature Page to Amendment No. 2 to Purchase and Sale Agreement ]
Exhibit 3.1
CERTIFICATE OF DESIGNATION
OF
SERIES B NON-PARTICIPATING PREFERRED STOCK
OF
SIGNATURE GROUP HOLDINGS, INC.
Signature Group Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware
(hereinafter called the “ Corporation ”), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation
(hereinafter called the “ Board of Directors ”) on February 25, 2015.
RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors in accordance with the provisions
of the Amended and Restated Certificate of Incorporation of the Corporation, the Board of Directors hereby creates a series of Preferred Stock,
par value $0.001 per share (the “ Preferred Stock ”), of the Corporation and hereby states the designation and number of shares, and fixes the
relative rights, powers and preferences, and qualifications, limitations and restrictions thereof as follows:
Section 1. Designation; Number of Shares . The shares of such series shall be classified and designated as Series B Non-Participating
Preferred Stock, par value $0.001 per share (the “ Series B Preferred Stock ”), and the number of shares constituting such series shall be
100,000. That number may from time to time be increased or decreased (but not below the number of Shares then outstanding) by the Board of
Directors in accordance with the Certificate of Incorporation and applicable law. The Series B Preferred Stock shall be issued in certificated
form.
Section 2. Defined Terms . For purposes hereof, the following terms shall have the following meanings:
“ Applicable Dividend Rate ” shall mean, from the Issuance Date until and including the eighteen (18) month anniversary thereof, seven
percent (7.00%), after the eighteen (18) month anniversary and through the thirty (30) month anniversary of the Issuance Date, eight percent
(8.00%), and after the thirty (30) month anniversary of the Issuance Date, nine percent (9.00%).
“ Board of Directors ” has the meaning set forth in the Recitals.
“ Business Day ” means a day other than Saturday, Sunday or other day on which commercial banks in New York, New York, United
States of America, are required to or may be closed.
“ Certificate of Designation ” means this Certificate of Designation creating the Series B Preferred Stock.
“ Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of the Corporation.
“ Change of Control ” means the occurrence of a “change of control” or words of similar meaning or effect under those high yield debt
securities or, in the event some or all of such high yield debt securities are unable to be issued at the time the consummation of the acquisition
pursuant to the Purchase Agreement, borrowings of bridge loans, contemplated by the commitment letter dated as of October 17, 2014, by and
among the Corporation, Goldman Sachs Bank USA, Deutsche Bank Securities Inc. and Deutsche Bank AG Cayman Islands Branch (the “
Secured Notes/Bridge ”), or any debt instrument or facility which initially refinances or replaces such Secured Notes/Bridge (or subsequently
refinances or replaces such instrument or facility) in whole or in part which permits the holder of any such instrument or facility to require the
Corporation or any of its subsidiaries to redeem or repurchase any such instrument or requires the Corporation or any of its subsidiaries to
repay such instruments or facility (any such debt instrument or facility, together with the Secured Notes/Bridge, the “ Notes ”).
“ Change of Control Date ” mean the date on which a Change of Control is consummated.
“ Change of Control Notice ” has the meaning set forth in Section 9.2 .
“ Change of Control Redemption Right ” has the meaning set forth in Section 9.1 .
“ Change of Control Redemption Right Expiration Date ” has the meaning set forth in Section 9.2 .
“ Common Stock ” means the common stock, par value $0.001 per share, of the Corporation.
“ Corporation ” has the meaning set forth in the Preamble.
“ Dividend Payment Date ” has the meaning set forth in Section 4.1 .
“ Dividend Period ” has the meaning set forth in Section 4.1 .
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations
thereunder, which shall be in effect at the time.
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“ Issuance Date ” means February 27, 2015.
“ Junior Securities ” means, collectively, the Series A Junior Participating Preferred Stock, the Common Stock and any other class of
securities hereafter authorized that is specifically designated as junior to the Series B Preferred Stock.
“ Liquidation Event ” has the meaning set forth in Section 5.1 .
“ Liquidation Preference ” means, with respect to any Share on any given date, the sum of (i) the Liquidation Value and (ii) the amount of
any accrued but unpaid dividends thereof, if any, whether or not declared, to and including such date.
“ Liquidation Value ” means, with respect to any Share on any given date, $1,000.00.
“ Parity Securities ” means any class of securities hereafter authorized that is specifically designated as ranking pari passu with the Series
B Preferred Stock.
“ Person ” means an individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association,
joint venture, joint stock company, trust or other entity or organization of any kind, including a governmental authority.
“ Preferred Stock ” has the meaning set forth in the Recitals.
“ Purchase Agreement ” means that certain Purchase and Sale Agreement, dated as of October 17, 2014, by and among Aleris
Corporation, a Delaware corporation, Aleris International, Inc., a Delaware corporation, Aleris Holding Canada Limited, a corporation
organized under the laws of Canada, Aleris Aluminum Netherlands B. V., a limited liability company organized under the laws of the
Netherlands, Aleris Deutschland Holding GmbH, a limited liability company organized under the laws of Germany, Dutch Aluminum C.V., a
limited partnership organized under the laws of the Netherlands, and Aleris Deutschland Vier GmbH Co KG, a limited partnership organized
under the laws of Germany, SGH Acquisition Holdco, Inc., a Delaware corporation, Evergreen Holding Germany GmbH, a limited liability
company organized under the laws of Germany, and the Corporation, as such Purchase Agreement may be amended from time to time.
“ Requisite Holders ” has the meaning set forth in Section 8.1 .
“ Securities Act ” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations
thereunder, which shall be in effect at the time.
“ Senior Securities ” means any class of securities hereafter authorized that is specifically designated as senior to the Series B Preferred
Stock.
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“ Series B Election Notice ” has the meaning set forth in Section 8.1 .
“ Series B Redemption ” has the meaning set forth in Section 8.1 .
“ Series B Redemption Date ” has the meaning set forth in Section 8.2(b) .
“ Series B Redemption Notice ” has the meaning set forth in Section 8.2 .
“ Series B Redemption Price ” has the meaning set forth in Section 7.1 .
“ Share ” means a share of Series B Preferred Stock.
“ Subsidiary ” or “ subsidiary ” means, with respect to any Person: (a) any other Person of which such Person beneficially owns, either
directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such other
Person, (ii) the total combined equity interests of such other Person, or (iii) the capital or profit interests of such other Person; or (b) any other
Person of which such Person has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors
or similar governing body of such other Person.
Section 3. Rank . With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, all Shares of the Series B Preferred Stock shall rank (i) pari passu with all Parity Securities,
(ii) senior to all Junior Securities and (iii) junior to all Senior Securities.
Section 4. Dividends .
4.1 Accrual and Payment of Dividends . From and after the Issuance Date of any Share, cumulative dividends on such Share shall
accrue, whether or not declared by the Board of Directors and whether or not there are funds legally available for the payment of dividends, in
arrears at a per annum rate equal to the Applicable Dividend Rate on the Liquidation Preference. The dividends on the Series B Preferred Stock
shall accrue from the Issue Date and shall be payable quarterly in arrears within five (5) Business Days following the last day of March, June,
September and December of each calendar year (each such date, a “ Dividend Payment Date ”) to the holders of record of the Series B
Preferred Stock on such Dividend Payment Date, except that if any such date is not a Business Day, then such dividend shall be payable on the
next Business Day. Subject to Section 4.2 . all accrued dividends on any Share shall be paid in cash only when, as and if declared by the Board
of Directors out of funds legally available therefor or upon a liquidation or redemption of the Series B Preferred Stock in accordance with the
provisions of Section 5 , Section 7 , Section 8 or Section 9 . All accrued and accumulated dividends on the Shares shall be prior and in
preference to any dividend on any Junior Securities and shall be fully declared and paid before any dividends are
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declared and paid, or any other distributions or redemptions arc made, on any Junior Securities, other than to declare or pay any dividend or
distribution payable on the Common Stock in shares of Common Stock.
Each dividend period (a “ Dividend Period ”) shall commence on and include a Dividend Payment Date and shall end on and include the
calendar day preceding the next Dividend Payment date, except that (x) the initial Dividend Period for Series B Preferred Stock issued on the
Issuance Date shall commence on and include the date of original issue of the Series B Preferred Stock, (y) the initial Dividend Period for any
Series B Preferred Stock issued after the Issuance Date shall commence on and include such date as the Board of Directors shall determine and
disclose at the time such additional shares are issued, or if no such determination is made, the date of issuance of such Series B Preferred Stock:
and (z) the final Dividend Period with respect to redeemed shares shall end on and include the calendar day preceding the date of redemption.
Dividends payable on the Series B Preferred Stock in respect of any Dividend Period shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
If, on any Dividend Payment Date, the Corporation fails to pay dividends in respect of the Shares equal to all dividends on the Shares
accrued but unpaid as of such date, the accrued but unpaid dividends on the Shares shall nonetheless accumulate and compound at the
Applicable Dividend Rate on such Dividend Payment Date and shall remain accumulated, compounding dividends on such Applicable
Dividend Rate, until paid pursuant hereto.
4.2 Payments in Kind . Notwithstanding any other provision of this Section 4 , any dividends accruing on the Series B Preferred Stock
shall be paid in lieu of cash dividends by the issuance of additional Shares of Series B Preferred Stock (including fractional shares) having an
aggregate Liquidation Value at the time of such payment equal to the amount of the dividend to have been paid: provided , h owever, on any
Dividend Payment Date following the twenty-four month (24) month anniversary of the Issuance Date, any such dividend shall be paid in cash.
Section 5. Liquidation .
5.1 Liquidation . In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (a “
Liquidation Event ”), the holders of Shares of Series B Preferred Stock then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders, before any payment shall be made to the holders of Junior Securities by reason of
their ownership thereof, an amount in cash equal to the aggregate Liquidation Preference of all Shares held by such holder.
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5.2 Insufficient Assets . If upon any Liquidation Event the remaining assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of the Shares of Series B Preferred Stock the full preferential amount to which they are
entitled under Section 5.1 and the holders of any Parity Securities the full preferential amount to which they are entitled under the terms of the
relevant instrument governing such Parity Securities, (a) the holders of the Shares and any Parity Securities shall share ratably in any
distribution of the remaining assets and funds of the Corporation in proportion to the respective full preferential amounts which would
otherwise be payable in respect thereof upon such Liquidation Event if all amounts payable on or with respect to such Shares and Parity
Securities were paid in full, and (b) the Corporation shall not make or agree to make any payments to the holders of Junior Securities.
Section 6. Voting Rights .
6.1 Voting Generally . The holders of Series B Preferred Stock shall not have any voting rights except as set forth below or as
otherwise from time to time required by law.
6.2 Amendment of Series B Preferred Stock; Dividends; Material Acquisitions; Mergers and Consolidations. So long as any shares
of Series B Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Certificate of
Incorporation, the vote or consent of the holders of a majority of the Shares of Series B Preferred Stock at the time outstanding and entitled to
vote thereon, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be
necessary for effecting or validating, either directly or indirectly by amendment, merger, consolidation or otherwise:
(i) Any amendment, alteration or repeal, as applicable, of any provision of the Certificate of Incorporation or Bylaws of the
Corporation so as to adversely affect the rights, preferences, privileges or voting powers of the Series B Preferred Stock;
(ii) At any time until the second (2nd) anniversary of the Issuance Date, (x) any declaration or payment of cash dividends on any
Common Stock or other Junior Stock, (y) any purchase, redemption or other acquisition for consideration of any Common Stock or other
Junior Stock, whether directly or indirectly or (z) if and only if the Corporation is delinquent in the payment of dividends on the Shares, any
declaration
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or payment of cash dividends or purchase, redemption or other acquisition for consideration of any Parity Stock, whether directly or indirectly;
provided , further , however, that the consent of the holders of the Series B Preferred Stock shall not be required in connection with any
repurchase of any Junior Stock held by any employee or consultant of the Corporation (x) upon any termination of such employee’s or
consultant’s employment or consultancy pursuant to any agreement providing for such repurchase or (y) otherwise permitted pursuant to an
agreement between the Corporation and an employee or consultant thereof;
(iii) So long as at least the aggregate Liquidation Preference of the issued and outstanding Series B Preferred Stock is in excess of
$10,000,000.00, acquire, or cause a Subsidiary of the Corporation to acquire, in any transaction or series of related transactions, the stock or all
or substantially all of the assets of another Person, for aggregate consideration (including the direct or indirect assumption of liabilities) valued
at more than 5.0% of the total consolidated assets of the Corporation and its Subsidiaries as of the most recent month-end prior to such
acquisition as reflected on the consolidated balance sheet of the Corporation prepared in accordance with generally accepted accounting
principles consistently applied; or
(iv) Any consummation of a binding share exchange or reclassification involving the Series B Preferred Stock, or of a merger or
consolidation of the Corporation with another corporation or other entity, unless in each case (x) the shares of Series B Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, are
converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, in each case, that is an entity
organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and (y) such shares of
Series B Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and
voting powers, and limitations and restrictions thereof, taken as a whole, as are not less favorable to the holders thereof than the rights,
preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series B Preferred Stock immediately prior to such
consummation, taken as a whole; provided , however , that this clause (iv) shall not apply to the extent a plan of merger, binding share
exchange or similar event provides that the holders of Series B Preferred Stock would receive an amount of cash in such merger, share
exchange or similar event equal to the Liquidation Preference as of the consummation of such merger, share exchange or similar event.
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Section 7. Redemption by the Corporation .
7.1 At any time following the Issuance Date, the Corporation may, upon thirty (30) days’ notice, redeem all or any portion of the
then outstanding shares of Series B Preferred Stock for cash at a redemption price per Share equal to the Liquidation Preference (the “ Series B
Redemption Price ”); provided , however, that to the extent the Corporation or any Subsidiary thereof is entitled to recover any Damages (as
such term is defined in the Purchase Agreement) by causing Aleris Corporation or any of its Subsidiaries or affiliates to forfeit shares of Series
B Preferred Stock pursuant to Section 9.08 of the Purchase Agreement, the Corporation may, upon five (5) days’ notice, redeem such portion of
the then outstanding shares of Series B Preferred Stock (or fraction thereof) with a Liquidation Preference equal to the amount of such
Damages (as such term is defined in the Purchase Agreement) without any payment being made to the holder of Series B Preferred Stock.
7.2 In order to exercise its right of redemption, the Corporation shall, not less than thirty (30) days prior to the redemption date (or
five (5) days in the event of a redemption related to Section 9.08 of the Purchase Agreement), give to each holder of record of the Series B
Preferred Stock, at such holder’s address as it shall appear upon the stock register of the Corporation on such date, notice by first class mail,
postage prepaid. Each such notice of redemption shall be irrevocable and shall specify the date that is the redemption date, the redemption
price, the number of Shares to be redeemed, the place or places of payment and that payment will be made upon presentation and, to the extent
that such Shares are certificated, surrender of the certificate(s) evidencing the Shares of Series B Preferred Stock to be redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require).
Section 8. Redemption by the Holders .
8.1 At any time following the sixty-sixth (66 th ) month anniversary of the Issuance Date, the holders of the then outstanding shares
of Series B Preferred Stock shall have the right (a “ Series B Redemption ”), to require the Corporation to redeem all, but not less than all of
such holder’s Series B Preferred Stock, out of funds legally available therefor, at the Series B Redemption Price; provided , however , that the
Corporation shall not be obligated to redeem any shares of Series B Preferred Stock pursuant to this Section 8.1 unless and until the holders of
a majority of the then outstanding shares of Series B Preferred Stock (the “ Requisite Holders ”) have made such a Redemption Election. Any
such Series B Redemption shall occur not more than ninety (90) days following receipt by the Corporation of a written election notice (the “
Series B Election Notice ”) from the Requisite Holders. Upon receipt of a Series B Election Notice, all holders of Series B Preferred Stock shall
be deemed to have elected to have all of their Shares redeemed pursuant to this Section 8 and such election shall bind all holders of Series B
Preferred Stock. In exchange for the surrender to the Corporation by the respective holders of Shares of Series B Preferred Stock of their
certificate or certificates
8
representing such Shares (to the extent that such Shares are certificated) in accordance with Section 8.4 below, the aggregate Series B
Redemption Price for all Shares held by each holder of Shares shall be payable in cash in immediately available funds to the respective holders
of the Series B Preferred Stock on the applicable Series B Redemption Date and the Corporation shall contribute all of its assets to the payment
of the Series B Redemption Price, and to no other corporate purpose, except to the extent prohibited by applicable Delaware law.
8.2 Redemption Notice . As promptly as practicable, but in no event later than twenty (20) days following receipt of a Series B
Election Notice from the Requisite Holders, the Corporation shall send written notice (the “ Series B Redemption Notice ”) of its receipt of a
Series B Election Notice to each holder of record of Series B Preferred Stock. Each Series B Redemption Notice shall state:
(a) the number of Shares of Series B Preferred Stock held by the holder that the Corporation shall redeem on the Series B Redemption
Date specified in the Series B Redemption Notice;
(b) the date of the closing of the redemption, which pursuant to Section 8.1 shall be no later than ninety (90) days following receipt by the
Corporation of the Series B Election Notice (the applicable date, the “ Series B Redemption Date ”) and the Series B Redemption Price; and
(c) to the extent such Shares are certificated, the manner and place designated for surrender by the holder to the Corporation of his, her or
its certificate or certificates representing the Shares of Series B Preferred Stock to be redeemed.
8.3 Insufficient Funds; Remedies For Nonpayment .
(a) Insufficient Funds . If on any Series B Redemption Date, the assets of the Corporation legally available are insufficient to pay the full
Series B Redemption Price for the total number of Shares elected to be redeemed pursuant to Section 8.1 , the Corporation shall (i) redeem out
of all such assets legally available therefor on the applicable Series B Redemption Date the maximum possible number of Shares that it can
redeem on such date, pro rata among the holders of such Shares to be redeemed in proportion to the aggregate number of Shares elected to be
redeemed by each such holder on the applicable Series B Redemption Date and (ii) following the applicable Series B Redemption Date, at any
time and from time to time when additional assets of the Corporation become legally available to redeem the remaining Shares, the Corporation
shall immediately use such assets to pay the remaining balance of the aggregate applicable Series B Redemption Price.
9
(b) Remedies For Nonpayment . If on any Series B Redemption Date, all of the Shares elected to be redeemed pursuant to a Series B
Election Notice are not redeemed in full by the Corporation by paying the entire Series B Redemption Price, until such Shares are fully
redeemed and the aggregate Series B Redemption Price paid in full, (i) all of the unredeemed Shares shall remain outstanding and continue to
have the rights, preferences and privileges expressed herein, including the accrual and accumulation of dividends thereon as provided in
Section 4 , (ii) interest on the portion of the aggregate Series B Redemption Price applicable to the unredeemed Shares shall accrue daily in
arrears at a rate equal to the lesser of (x) 4.0% or (y) the prime rate, as published in the Eastern Edition of the Wall Street Journal per annum,
compounded quarterly.
8.4 Surrender of Certificates . To the extent that such Shares are certificated, on or before the Series B Redemption Date, each
holder of Shares of Series B Preferred Stock shall surrender the certificate or certificates representing such Shares to the Corporation, in the
manner and place designated in the Series B Redemption Notice, duly assigned or endorsed for transfer to the Corporation (or accompanied by
duly executed stock powers relating thereto), or, in the event the certificate or certificates are lost, stolen or missing, shall deliver an affidavit of
loss, in the manner and place designated in the Series B Redemption Notice. To the extent that such Shares are certificated, each surrendered
certificate shall be canceled and retired and the Corporation shall thereafter make payment of the applicable Series B Redemption Price by
certified check or wire transfer to the holder of record of such certificate; provided , however , that if less than all the Shares represented by a
surrendered certificate are redeemed, then a new stock certificate representing the unredeemed Shares shall be issued in the name of the
applicable holder of record of canceled stock certificate.
8.5 No Rights Subsequent to Redemption . If on the applicable Series B Redemption Date, the Series B Redemption Price is paid
(or tendered for payment) for any of the Shares to be redeemed on such Series B Redemption Date, then on such date all rights of the holder in
the Shares so redeemed and paid or tendered, including any rights to dividends on such Shares, shall cease, and such Shares shall no longer be
deemed issued and outstanding.
Section 9. Change of Control .
9.1 Change of Control Redemption Right. Notwithstanding anything to the contrary in this Certificate of Designation, upon
consummation of a Change of Control, the holders of the then outstanding Shares of Series B Preferred Stock shall have the right (a “ Change
of Control Redemption Right ”) to require the Corporation to redeem each Share held by such holder for cash at a price per Share equal to the
Liquidation
10
Preference; pr ovided, however, this Section 9.1 shall not apply, and no holder of any Shares of Series B Preferred Stock shall have a Change
of Control Redemption Right, to the extent the Change of Control would result in the holders of Series B Preferred Stock receiving an amount
of cash equal to the Liquidation Preference as of the consummation of such Change of Control.
9.2 The Corporation shall give each holder of Series B Preferred Stock notice of any Change of Control within ten (10) calendar
days of entering into any arrangement or agreement that, if consummated, would constitute a Change of Control. In addition, no later than five
(5) calendar days following the Change of Control Date, the Corporation shall give each holder notice of the holder’s right to require the
Corporation to repurchase any or all shares of Series B Preferred Stock held by such holder (the “ Change of Control Notice ”). The Change of
Control Notice shall be mailed to each holder of record at such holder’s address as it shall appear upon the stock register of the Corporation on
such date, notice by first class mail, postage prepaid and shall state (i) the date by which the Change of Control Redemption Right must be
exercised, which date shall be no earlier than thirty (30) calendar days and no later than sixty (60) calendar days after the date of the Change of
Control Notice (and, if necessary to cause the repurchase of the Shares not to constitute a default or event of default under the Corporation’s
Material Debt Instruments, shall be no earlier than the change of control payment date (or words of similar meaning or effect under the
Corporation’s Material Debt Instruments), (the “ Change of Control Redemption Right Expiration Date ”), (ii) the Liquidation Preference and
(iii) a description of the procedures that a holder must follow to exercise the Change of Control Redemption Right.
9.3 To exercise the Change of Control Redemption Right, a holder of Series B Preferred Stock shall deliver to the Corporation, on
or before the Change of Control Redemption Right Expiration Date, a written notice specifying the number of Shares to be repurchased by the
Corporation. Each holder of Series B Preferred Stock shall retain the right to withdraw an election to have such shares repurchased at any time
on or prior to the Change of Control Redemption Right Expiration Date, which withdrawal shall be evidenced by delivery to the Secretary of
the Corporation and receipt by the Corporation at the Corporation’s principal executive offices of such notice of withdrawal, by hand delivery
during regular business hours or by first class mail, postage prepaid, on or prior to the Change of Control Redemption Right Expiration Date.
To the extent that (and as) funds are legally available therefor, the Corporation shall repurchase, within ten (10) calendar days following the
Change of Control Redemption Right Expiration Date (or, to the extent funds are not legally available on the Change of Control Redemption
Right Expiration Date, on the first date that funds become legally available therefor) all Shares with respect to which the Change of Control
Redemption Right is exercised.
11
9.4 Notwithstanding anything herein to the contrary, (i) the Corporation shall comply with all requirements under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the Change of
Control Redemption Right; (ii) no failure by the Corporation to give the Change of Control Notice and no defect in any Change of Control
Notice shall limit any holder’s right to exercise its Change of Control Redemption Right or affect the validity of any proceedings for the
repurchase of Shares; and (iii) the Corporation shall not be required to (and may not) repurchase the Shares pursuant to the provisions of this
Section 9 to the extent such repurchase constitutes a default or event of default under the Notes or such Change of Control requires the
Corporation or any of its subsidiaries to repay or repurchase or offer to repay or repurchase the Notes.
Section 10. Reissuance of Series B Preferred Stock . Any Shares of Series B Preferred Stock redeemed or otherwise acquired by the
Corporation or any Subsidiary shall become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set
forth herein.
Section 11. Notices . Except as otherwise provided herein, all notices, requests, consents, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation
of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the third day
after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent (a) to the
Corporation, at its principal executive offices and (b) to any stockholder, at such holder’s address at it appears in the stock records of the
Corporation (or at such other address for a stockholder as shall be specified in a notice given in accordance with this Section 11) .
Section 12. Transfer Restrictions .
12.1 Series B Preferred Stock held by Aleris Corporation or one or more of its Subsidiaries having a Liquidation Preference of
$30,000,000.00 shall not be transferrable (other than to one or more subsidiaries of Aleris Corporation) except as expressly permitted by
Section 7 hereof, without the consent of the Corporation, at its sole discretion, until eighteen (18) months following the Issuance Date; provided
that, to the extent that upon the eighteenth (18 th ) month anniversary of the Issuance Date, the Corporation shall have pending claims for
Damages against the Buyer under the Purchase Agreement, Aleris Corporation and its Subsidiaries shall not be entitled to transfer shares of
Series B Preferred Stock having a Liquidation Preference equal to the amount of such pending claims until such claims are resolved.
12
12.2 The certificates, if any, evidencing the Series B Preferred Stock shall, unless otherwise agreed to by the Corporation and the
holders of any such certificates, bear a legend substantially to the following effect:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION
UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
IN CONNECTION WITH ANY TRANSFER, IF REASONABLY REQUESTED BY THE CORPORATION THE HOLDER
SHALL DELIVER TO THE CORPORATION AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND/OR APPLICABLE STATE SECURITIES LAW IS AVAILABLE AND
SUCH CERTIFICATES AND OTHER INFORMATION AS THE CORPORATION MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
THESE SECURITIES ARE SUBJECT TO REDEMPTION BY THE CORPORATION. THE CORPORATION SHALL
FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS THE DESIGNATIONS, POWERS,
PREFERENCES AND RELATIVE AND OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES OF STOCK
OF THE CORPORATION AUTHORIZED TO BE ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED, AND THE
AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF
SUBSEQUENT CLASSES OR SERIES.
13
THESE SECURITIES ARE SUBJECT TO FORFEITURE PURSUANT TO SECTION 9.08 OF THE PURCHASE AND SALE
AGREEMENT (THE “PURCHASE AGREEMENT”), DATED AS OF OCTOBER 17, 2014, BY AND AMONG ALERIS
CORPORATION, ALERIS INTERNATIONAL, INC., ALERIS ALUMINUM NETHERLANDS B.V., ALERIS
DEUTSCHLAND HOLDING GMBH, ALERIS HOLDING CANADA LIMITED, DUTCH ALUMINUM C.V., ALERIS
DEUTSCHLAND VIER GMBH CO KG, SGH ACQUISITION HOLDCO, INC., EVERGREEN HOLDING COMPANY
GERMANY GMBH, AND THE CORPORATION, AS SUCH PURCHASE AGREEMENT MAY BE AMENDED FROM TIME
TO TIME. THE CORPORATION SHALL FURNISH WITHOUT EACH CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS THE TERMS AND CONDITIONS OF SUCH PURCHASE AGREEMENT”.
12.3 The Corporation shall be entitled to refuse to register any attempted transfer of shares of Series B Preferred Stock not in
compliance with Section 12.1 or Section 12.2 , and any such purported non-compliant transfer shall be null, void and of no effect. As a
condition to any registration of transfer, the Corporation may require an opinion of counsel or other evidence reasonably satisfactory to it that
such transfer is in compliance with the legend in Section 12.2 .
14
Section 13. Conversion Rights. The Series B Preferred Stock shall not be convertible into Senior Securities, Junior Securities or any other
security, and does not otherwise have any conversion rights.
Section 14. Waiver . The Holders of at least a majority of the outstanding shares of Series B Preferred Stock, voting as one class, may
also amend and waive compliance with any provision of this Certificate of Designation.
Section 15. No Preemptive Rights . No share of Series B Preferred Stock shall have any rights of preemption whatsoever as to any
securities of the Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such
warrants, rights or options, may be designated, issued or granted.
Section 16. No Sinking Fund . No sinking fund shall be created for the redemption or purchase of shares of the Series B Preferred Stock.
Section 17. Transfer Taxes . The Corporation shall pay any and all stock transfer, documentary, stamp and similar taxes that may be
payable in respect of any initial issuance or delivery of the Series B Preferred Stock or certificates representing such Shares, if any. The
Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery
of Shares in a name other than that in which the Shares were registered, or in respect of any payment to any Person other than a payment to the
initial registered holder thereof.
Section 18. Other Rights . The shares of Series B Preferred Stock shall not have any rights, preferences, privileges or voting powers or
relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the
Certificate of Incorporation or as provided by applicable law.
[SIGNATURE PAGE FOLLOWS]
15
IN WITNESS WHEREOF, Signature Group Holdings, Inc. has caused its corporate seal to be hereunto affixed and this Certificate of
Designation to be signed by its Executive Vice President, this 27 th day of February, 2015.
SIGNATURE GROUP HOLDINGS, INC.
By:
/s/ W. Christopher Manderson
Name: W. Christopher Manderson
Title: Executive Vice President
Exhibit 4.1
EXECUTION VERSION
FIRST SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this “ First Supplemental Indenture ”), dated as of February 27, 2015 among Real Alloy Holding,
Inc., a Delaware corporation (the “ Company ”), Real Alloy Intermediate Holding, LLC, a Delaware limited liability company (“
Intermediate Holdings ”), each of the Guarantors listed on the signature pages hereto (the “ Additional Guarantors ”), Wilmington Trust,
National Association, as trustee under the Indenture (the “ Trustee ”) and Wilmington Trust, National Association, as notes collateral trustee
under the Indenture (the “ Notes Collateral Trustee ”).
WITNESSETH:
WHEREAS, SGH Escrow Corporation, a Delaware corporation (the “ Escrow Issuer ”) and Intermediate Holdings have heretofore
executed and delivered to the Trustee an Indenture (the “ Indenture ”), dated as of January 8, 2015, providing for the issuance of 10.000%
Senior Secured Notes Due 2019 (the “ Notes ”);
WHEREAS, on the date hereof, the Escrow Issuer is merging with and into the Company, with the Company being the surviving entity of
such merger and the Escrow Issuer ceasing to exist (the “ Merger ”);
WHEREAS, Section 4.10 and Section 10.06 of the Indenture provide that under certain circumstances the Company will cause the
Additional Subsidiary Guarantors to execute and deliver to the Trustee a guaranty agreement pursuant to which the Additional Subsidiary
Guarantors will Guarantee payment of the Notes on the same terms and conditions as those set forth in Article 10 of the Indenture; and
WHEREAS, pursuant to Section 9.01(a)(iii) and (v) of the Indenture, the Trustee and the Company are authorized to execute and deliver
this First Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties to this First Supplemental Indenture mutually covenant and agree for the equal and ratable benefit of the Holders of
the Notes as follows:
SECTION 1. Capitalized Terms. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture.
SECTION 2. Assumption of Obligations. Effective upon consummation of the Merger, the Company, pursuant to Article 5 of the
Indenture, hereby expressly assumes and agrees to pay, perform and/or discharge when due each and every debt, obligation, covenant and
agreement incurred, made or to be paid, performed or discharged by the Escrow Issuer under the Indenture and the Notes. The Company
hereby agrees to be bound by all the terms, provisions and conditions of the Indenture and the Notes to which Escrow Issuer was theretofore
bound and, as the surviving entity, shall succeed to, and be substituted for, and may exercise every right and power of, the Escrow Issuer under
the Indenture and the Notes.
SECTION 3. Guarantees. Each Additional Subsidiary Guarantor hereby agrees, jointly and severally with all other Guarantors, to
guarantee the Company’s obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to
be bound by all other applicable provisions of the Indenture (including Article 11).
SECTION 4. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is
in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This First
Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and
delivered shall be bound hereby.
SECTION 5. Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this First
Supplemental Indenture.
SECTION 7. Counterparts. The parties may sign any number of copies of this First Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.
SECTION 8. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction of this First
Supplemental Indenture.
2
IN WITNESS WHEREOF, the parties have caused this First Supplemental Indenture to be duly executed as of the date first written
above.
REAL ALLOY HOLDING, INC.,
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Vice President and Secretary
REAL ALLOY INTERMEDIATE HOLDING, LLC,
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Manager
ALERIS RECYCLING, INC.,
Effective upon the change of name from “Aleris Recycling,
Inc.”
to “Real Alloy Recycling, Inc.”:
REAL ALLOY RECYCLING, INC.,
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Assistant Secretary
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Assistant Secretary
ALERIS SPECIALTY PRODUCTS, INC.,
Effective upon the change of name from “Aleris Specialty
Products, Inc.”
to “Real Alloy Specialty Products, Inc.”:
REAL ALLOY SPECIALTY PRODUCTS, INC.,
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Assistant Secretary
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Assistant Secretary
(Signature page to the Supplemental Indenture)
ETS SCHAEFER, INC.,
By: /s/ Chris Manderson
Name:
Chris Manderson
Title:
Assistant Secretary
ALERIS SPECIFICATION ALLOYS, INC.,
Effective upon the change of name from “Aleris Specification
Alloys, Inc.”
to “Real Alloy Specialty Products, Inc.”:
REAL ALLOY SPECIFICATION ALLOYS, INC.,
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Assistant Secretary
By: /s/ Chris Manderson
Name:
Chris Manderson
Title:
Assistant Secretary
ALERIS RECYCLING BENS RUN, LLC,
Effective upon the change of name from “Aleris Recycling Bens
Run, LLC.”
to “Real Alloy Specialty Products, Inc.”:
REAL ALLOY BENS RUN, LLC,
By: /s/ Chris Manderson
Name: Chris Manderson
Title:
Assistant Secretary
By: /s/ Chris Manderson
Name:
Chris Manderson
Title:
Assistant Secretary
RA MEXICO HOLDING, LLC,
By: /s/ Chris Manderson
Name:
Chris Manderson
Title:
Vice President and Secretary
(Signature page to the Supplemental Indenture)
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:
/s/ Jane Schweiger
Name:
Jane Schweiger
Title:
Vice President
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Notes
Collateral Trustee
By:
/s/ Jane Schweiger
Name:
Jane Schweiger
Title:
Vice President
(Signature page to the Supplemental Indenture)
Exhibit 4.2
[FACE OF REPLACEMENT NOTE]
REAL ALLOY HOLDING, INC.
10.000% SENIOR SECURED NOTES DUE 2019
CUSIP No. 75583R AA5
ISIN No. US75583RAA59
$301,000,000
No. A-1
REAL ALLOY HOLDING, INC., a Delaware corporation, promises to pay to Cede & Co., or its registered assigns, the principal sum of
THREE HUNDRED ONE MILLION DOLLARS ($301,000,000) (or such other amount as set forth on the Schedule of Exchanges of Interests
In the Global Note attached hereto) on January 15, 2019.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Note are set forth on the other side of this Note.
Dated: February 27, 2015
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
REAL ALLOY HOLDING, INC.
by:
Name:
Title:
Chris Manderson
Vice President and Secretary
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes
referred to in the Indenture.
by:
/s/ Jane Schweiger
Authorized Signatory
Dated:
February 27, 2015
[REVERSE SIDE OF REPLACEMENT NOTE]
10.000% SENIOR SECURED NOTES DUE 2019
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.02 AND SECTION 2.07 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE ISSUER.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
1.
Interest
Real Alloy Holding, Inc., a Delaware corporation (such Person, and its successors and assigns under the Indenture hereinafter referred to,
being herein called the “Issuer”), promises to pay interest on the principal amount of this Note at a rate per annum of 10.000%. The Issuer will
pay interest semiannually in arrears to the holders of record of the Notes on January 15 and July 15 of each year, commencing July 15, 2015.
Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer will pay interest on overdue principal at the rate
borne by this Note plus 1.0% per annum, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.
2.
Method of Payment
The Issuer will pay interest on the Notes (except defaulted interest) to the Persons who are registered holders of Notes at the close of
business on the January 1 and July 1 next preceding the interest payment date even if Notes are canceled after the record date and on or before
the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and
interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of
the Notes represented by a Global Note (including principal, premium and interest) will be made by wire transfer of immediately available
funds to the accounts specified by the Depositary. The Issuer will make all payments in respect of a certificated Note (including principal,
premium and interest) through the Paying Agent by mailing a check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States
if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its
discretion).
3.
Paying Agent and Registrar
Initially, Wilmington Trust, National Association (the “Trustee”), will act as Paying Agent and Registrar. The Issuer may appoint and
change any Paying Agent, Registrar or co-registrar without notice.
4.
Indenture
The Issuer issued the Notes under an Indenture dated as of January 8, 2015 (the “Indenture”), among SGH Escrow Corporation, a
Delaware corporation (the “Escrow Issuer”), Intermediate Holdings, the Trustee and Wilmington Trust, National Association, as Notes
Collateral Trustee. The obligations of the Escrow Issuer under the Indenture were assumed by
the Issuer pursuant to a supplemental indenture dated as of February 27, 2015. The terms of the Notes include those stated in the Indenture.
Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such
terms, and Noteholders are referred to the Indenture and the Securities Act for a statement of those terms.
The Notes are secured obligations of the Issuer. The Indenture contains covenants that, among other things, limit the ability of the Issuer
and its Restricted Subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make
investments; engage in transactions with affiliates; create liens on assets to secure indebtedness; transfer or sell assets; guarantee indebtedness;
restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets; and engage in
sale/leaseback transactions. These covenants are subject to important exceptions and qualifications contained in the Indenture. If and to the
extent that any provision of this Note limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall
control.
5.
Optional Redemption
Except as set forth below, the Issuer shall not be entitled to redeem the Notes.
On and after January 15, 2018, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, upon not
less than 30 nor more than 60 days’ prior notice provided in accordance with the Indenture, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to (but not including) the redemption date
(subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date falling on or
prior to the redemption date), if redeemed during the periods indicated below:
Period
Redemption
Price
January 15, 2018 – July 14, 2018
105.000 %
July 15, 2018 and thereafter
100.000 %
In addition, prior to January 15, 2018, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time,
upon not less than 30 nor more than 60 days’ prior notice provided in accordance with the Indenture, at a redemption price equal to 100% of
the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and additional interest, if any,
to (but not including) the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date falling on or prior to the redemption date). Unless the Issuer defaults in the payment of the redemption
price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.
Notwithstanding the foregoing, at any time and from time to time on or prior to January 15, 2018, the Issuer may redeem, upon not less
than 30 nor more than 60 days’ prior notice provided in accordance with the Indenture, in the aggregate principal amount not to exceed 35% of
the original aggregate principal amount of the Notes (which includes Additional Notes, if any) with the net cash proceeds of one or more
Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, to the extent the net cash proceeds thereof are contributed
to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a
redemption price (expressed as a percentage of principal amount thereof) of 110.000% plus accrued and unpaid interest and additional interest,
if any, to (but not including) the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on
the relevant interest payment date); provided, however, that (1) at least 65% of the aggregate principal amount of the Notes (which includes
Additional Notes, if any), remains outstanding after each such redemption and (2) such redemption shall occur within 90 days after the date on
which any such Equity Offering is consummated and otherwise in accordance with the procedures set forth in the Indenture. Notice of any
redemption upon any Equity Offering may be given prior to the completion thereof.
In connection with any redemption of Notes under the Indenture (including in connection with a Change of Control, an Asset Sale Offer
or a redemption described in this Paragraph 5), any such redemption may, at the Issuer’s discretion, be subject to one or more conditions
precedent, including any related Equity Offering, other financing or a Change of Control. In addition, if such redemption or notice is subject to
satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer’s discretion, any of such conditions may be waived,
the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such
notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption
date so delayed.
6.
Notice of Redemption
Notice of redemption will be provided at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to
be redeemed. Notes in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000 in
excess thereof. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
7.
[Reserved]
8.
Put Provisions
Unless the Issuer has given notice of redemption as described under Article 3 of the Indenture with respect to all the Notes, not later than
30 days following any Change of Control, any Holder of Notes will have the right to cause the Issuer to purchase all or any part of the Notes of
such Holder at a purchase price equal to 101% of the principal amount of the Notes to be purchased plus accrued interest to the date of
purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date) as
provided in, and subject to the terms of the Indenture.
9.
Guarantee
The payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint
and several basis by each of the Guarantors to the extent set forth in the Indenture.
10.
Security
The Notes will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture, the Security Documents
and the Intercreditor Agreement.
11.
Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of $2,000 principal amount and whole multiples of $1,000 in excess
thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things,
to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed or 15 days before
an interest payment date.
12.
Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it for all purposes.
13.
Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money
must look only to the Issuer and not to the Trustee for payment.
14.
Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the Issuer at any time shall be entitled to terminate some or all of its and the
Guarantors’ obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money or, in certain cases, U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.
15.
Amendment, Waiver
The Issuer and the Trustee may amend the Indenture, the Notes, any Security Document or the Intercreditor Agreement to the extent
provided in Article 9 of the Indenture.
16.
Defaults and Remedies
Article 6 of the Indenture provides for certain Events of Default and remedies with respect to the Notes.
17.
Trustee Dealings with the Issuer
Subject to certain limitations imposed by the Securities Act, the Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may
otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.
18.
No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not have any liability for any obligations of the
Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation; provided,
however, the foregoing will not affect or limit any liability of any Guarantor under the Indenture or its Guarantee. By accepting a Note, each
Noteholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.
19.
Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
20.
Abbreviations
Customary abbreviations may be used in the name of a Noteholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and
U/G/M/A (=Uniform Gift to Minors Act).
21.
CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer have caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to
Noteholders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers placed thereon.
22.
Intercreditor Agreement
Reference is made to the Intercreditor Agreement dated as of the Issue Date, among General Electric Capital Corporation, as
North America ABL Agent; Wilmington Trust, National Association, as Notes Collateral Trustee; Real Alloy Intermediate Holding,
LLC; the Issuer; and the Guarantors from time to time party thereto, as it may be amended from time to time in accordance with this
Indenture (the “Intercreditor Agreement”). Each Holder, by its acceptance of a Note, (a) consents to the subordination of Liens
provided for in the Intercreditor Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of
the Intercreditor Agreement and (c) authorizes and instructs the Trustee and the Notes Collateral Trustee to enter into the
Intercreditor Agreement as Trustee and Notes Collateral Trustee, respectively, and on behalf of such Holder. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with a provision of the Intercreditor Agreement, such provision of the
Intercreditor Agreement shall control. The foregoing provisions are intended as an inducement to the holders of Lenders Debt to
extend credit and such holders are intended third party beneficiaries of such provisions and the provisions of the Intercreditor
Agreement.
23.
Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
The Issuer will furnish to any Noteholder upon written request and without charge to the Noteholder a copy of the Indenture which has in
it the text of this Note in larger type. Requests may be made to:
Real Alloy Holding, Inc.
15301 Ventura Boulevard
Suite 400
Sherman Oaks, CA 91403
Attention: Kyle Ross
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint
for him.
agent to transfer this Note on the books of the Issuer. The agent may substitute another to act
Dated:
Your Signature:
Sign exactly as your name appears on the other side of this Note.
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, check the box:

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the
amount in principal amount: $
Dated:
Your Signature:
(Sign exactly as your name appears on the other side of this Note.)
Signature Guarantee:
(Signature must be guaranteed)
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Date of Exchange
Amount of decrease in
Principal amount of
this Global Note
Amount of increase
in Principal amount
of this Global Note
Principal amount of
this Global Note
following such
decrease or increase
Signature of
authorized signatory
of Trustee or Notes
Custodian
Exhibit 4.3
[FACE OF REPLACEMENT REGULATION S TEMPORARY GLOBAL NOTE]
REAL ALLOY HOLDING, INC.
10.000% SENIOR SECURED NOTES DUE 2019
CUSIP No. U7535L AA7
ISIN No. USU7535LAA71
$4,000,000
No. S-1
REAL ALLOY HOLDING, INC., a Delaware corporation, promises to pay to Cede & Co., or its registered assigns, the principal sum of
FOUR MILLION DOLLARS ($4,000,000) (or such other amount as set forth on the Schedule of Exchanges of Interests In the Global Note
attached hereto) on January 15, 2019.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Note are set forth on the other side of this Note.
Dated: February 27, 2015
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
REAL ALLOY HOLDING, INC.
by:
Name:
Title:
Chris Manderson
Vice President and Secretary
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes
referred to in the Indenture.
by:
/s/ Jane Schweiger
Authorized Signatory
Dated:
February 27, 2015
[BACK OF REPLACEMENT REGULATION S TEMPORARY GLOBAL NOTE]
10.000% SENIOR SECURED NOTES DUE 2019
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.02 AND SECTION 2.07 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE ISSUER.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
1.
Interest
Real Alloy Holding, Inc., a Delaware corporation (such Person, and its successors and assigns under the Indenture hereinafter referred to, being
herein called the “Issuer”), promises to pay interest on the principal amount of this Note at a rate per annum of 10.000%. The Issuer will pay
interest semiannually in arrears to the holders of record of the Notes on January 15 and July 15 of each year, commencing July 15, 2015.
Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer will pay interest on overdue principal at the rate
borne by this Note plus 1.0% per annum, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.
2.
Method of Payment
The Issuer will pay interest on the Notes (except defaulted interest) to the Persons who are registered holders of Notes at the close of
business on the January 1 and July 1 next preceding the interest payment date even if Notes are canceled after the record date and on or before
the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and
interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of
the Notes represented by a Global Note (including principal, premium and interest) will be made by wire transfer of immediately available
funds to the accounts specified by the Depositary. The Issuer will make all payments in respect of a certificated Note (including principal,
premium and interest) through the Paying Agent by mailing a check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States
if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its
discretion).
3.
Paying Agent and Registrar
Initially, Wilmington Trust, National Association (the “Trustee”), will act as Paying Agent and Registrar. The Issuer may appoint and
change any Paying Agent, Registrar or co-registrar without notice.
4.
Indenture
The Issuer issued the Notes under an Indenture dated as of January 8, 2015 (the “Indenture”), among SGH Escrow Corporation, a
Delaware corporation (the “Escrow Issuer”), Intermediate Holdings, the Trustee and Wilmington Trust, National Association, as Notes
Collateral Trustee. The obligations of the Escrow Issuer under the Indenture were assumed by the Issuer pursuant to a supplemental indenture
dated as of February 27, 2015. The terms of the Notes include those stated in the Indenture. Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Noteholders are referred to the
Indenture and the Securities Act for a statement of those terms.
The Notes are secured obligations of the Issuer. The Indenture contains covenants that, among other things, limit the ability of the Issuer and its
Restricted Subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make
investments; engage in transactions with affiliates; create liens on assets to secure indebtedness; transfer or sell assets; guarantee indebtedness;
restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets; and engage in
sale/leaseback transactions. These covenants are subject to important exceptions and qualifications contained in the Indenture. If and to the
extent that any provision of this Note limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall
control.
5.
Optional Redemption
Except as set forth below, the Issuer shall not be entitled to redeem the Notes.
On and after January 15, 2018, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, upon not
less than 30 nor more than 60 days’ prior notice provided in accordance with the Indenture, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to (but not including) the redemption date
(subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date falling on or
prior to the redemption date), if redeemed during the periods indicated below:
Period
Redemption
Price
January 15, 2018 – July 14, 2018
105.000 %
July 15, 2018 and thereafter
100.000 %
In addition, prior to January 15, 2018, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time,
upon not less than 30 nor more than 60 days’ prior notice provided in accordance with the Indenture, at a redemption price equal to 100% of
the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and
unpaid interest and additional interest, if any, to (but not including) the applicable redemption date (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant interest payment date falling on or prior to the redemption date). Unless the
Issuer defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on
the applicable redemption date.
Notwithstanding the foregoing, at any time and from time to time on or prior to January 15, 2018, the Issuer may redeem, upon not less
than 30 nor more than 60 days’ prior notice provided in accordance with the Indenture, in the aggregate principal amount not to exceed 35% of
the original aggregate principal amount of the Notes (which includes Additional Notes, if any) with the net cash proceeds of one or more
Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, to the extent the net cash proceeds thereof are contributed
to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a
redemption price (expressed as a percentage of principal amount thereof) of 110.000% plus accrued and unpaid interest and additional interest,
if any, to (but not including) the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on
the relevant interest payment date); provided, however, that (1) at least 65% of the aggregate principal amount of the Notes (which includes
Additional Notes, if any), remains outstanding after each such redemption and (2) such redemption shall occur within 90 days after the date on
which any such Equity Offering is consummated and otherwise in accordance with the procedures set forth in the Indenture. Notice of any
redemption upon any Equity Offering may be given prior to the completion thereof.
In connection with any redemption of Notes under the Indenture (including in connection with a Change of Control, an Asset Sale Offer
or a redemption described in this Paragraph 5), any such redemption may, at the Issuer’s discretion, be subject to one or more conditions
precedent, including any related Equity Offering, other financing or a Change of Control. In addition, if such redemption or notice is subject to
satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer’s discretion, any of such conditions may be waived,
the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such
notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption
date so delayed.
6.
Notice of Redemption
Notice of redemption will be provided at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to
be redeemed. Notes in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000 in
excess thereof. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
7.
[Reserved]
8.
Put Provisions
Unless the Issuer has given notice of redemption as described under Article 3 of the Indenture with respect to all the Notes, not later than
30 days following any Change of Control, any Holder of Notes will have the right to cause the Issuer to purchase all or any part of the Notes of
such Holder at a purchase price equal to 101% of the principal amount of the Notes to be purchased plus accrued interest to the date of
purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date) as
provided in, and subject to the terms of the Indenture.
9.
Guarantee
The payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint
and several basis by each of the Guarantors to the extent set forth in the Indenture.
10.
Security
The Notes will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture, the Security Documents
and the Intercreditor Agreement.
11.
Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of $2,000 principal amount and whole multiples of $1,000 in excess
thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things,
to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed or 15 days before
an interest payment date.
12.
Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it for all purposes.
13.
Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money
must look only to the Issuer and not to the Trustee for payment.
14.
Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the Issuer at any time shall be entitled to terminate some or all of its and the
Guarantors’ obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money or, in certain cases, U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.
15.
Amendment, Waiver
The Issuer and the Trustee may amend the Indenture, the Notes, any Security Document or the Intercreditor Agreement to the extent
provided in Article 9 of the Indenture.
16.
Defaults and Remedies
Article 6 of the Indenture provides for certain Events of Default and remedies with respect to the Notes.
17.
Trustee Dealings with the Issuer
Subject to certain limitations imposed by the Securities Act, the Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may
otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.
18.
No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not have any liability for any obligations of the
Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation; provided,
however, the foregoing will not affect or limit any liability of any Guarantor under the Indenture or its Guarantee. By accepting a Note, each
Noteholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.
19.
Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.
20.
Abbreviations
Customary abbreviations may be used in the name of a Noteholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and
U/G/M/A (=Uniform Gift to Minors Act).
21.
CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer have caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to
Noteholders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers placed thereon.
22.
Intercreditor Agreement
Reference is made to the Intercreditor Agreement dated as of the Issue Date, among General Electric Capital Corporation, as
North America ABL Agent; Wilmington Trust, National Association, as Notes Collateral Trustee; Real Alloy Intermediate Holding,
LLC; the Issuer; and the Guarantors from time to time party thereto, as it may be amended from time to time in accordance with this
Indenture (the “Intercreditor Agreement”). Each Holder, by its acceptance of a Note, (a) consents to the subordination of Liens
provided for in the Intercreditor Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of
the Intercreditor Agreement and (c) authorizes and instructs the Trustee and the Notes Collateral Trustee to enter into the
Intercreditor Agreement as Trustee and Notes Collateral Trustee, respectively, and on behalf of such Holder. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with a provision of the Intercreditor Agreement, such provision of the
Intercreditor Agreement shall control. The foregoing provisions are intended as an inducement to the holders of Lenders Debt to
extend credit and such holders are intended third party beneficiaries of such provisions and the provisions of the Intercreditor
Agreement.
23.
Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
The Issuer will furnish to any Noteholder upon written request and without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:
Real Alloy Holding, Inc.
15301 Ventura Boulevard
Suite 400
Sherman Oaks, CA 91403
Attention: Kyle Ross
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint
for him.
agent to transfer this Note on the books of the Issuer. The agent may substitute another to act
Dated:
Your Signature:
Sign exactly as your name appears on the other side of this Note.
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, check the box:

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the
amount in principal amount: $
Dated:
Your Signature:
(Sign exactly as your name appears on the other side of this Note.)
Signature Guarantee:
(Signature must be guaranteed)
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Date of Exchange
Amount of decrease in
Principal amount of
this Global Note
Amount of increase
in Principal amount
of this Global Note
Principal amount of
this Global Note
following such
decrease or increase
Signature of
authorized signatory
of Trustee or Notes
Custodian
Exhibit 4.4
NUMBER SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
SIGNATURE GROUP HOLDINGS, INC.
TOTAL AUTHORIZED ISSUE
100,000 SHARES PAR VALUE $.001 EACH
SERIES B NON-PARTICIPATING PREFERRED STOCK
See Reverse for Certain Definitions
This is to Certify thant ___ is the owner of ___ fully paid and non-assessable shares of the above Corporation transferable only on the books of the Corporation by the holder hereof in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed.
Witness, the seal of the Corporation and the signatures of its duly authorized officers.
Dated
CRAIG T. BOUCHARD
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
W. CHRISTOPHER MANDERSON
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
© 1999 CORPEX BANKNOTE CO., BAY SHORE N.Y.
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF TRANSFERS MIN ACT- Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Transfers to Minors
Act.
JT TEN - as joint tenants with right of (State)
survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list
For value received ___ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)
__ Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint
___ Attorney to transfer the said Shares on the books of the within named Corporation with full power of substitution in the premises.
Dated
In presence of
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND ARE “RESTRICTED SECURITIES” AS DEFINED IN RULE 144 PROMULGATED UNDER THE
ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT, (II) IN COMPLIANCE WITH
RULE 144 OR (III) WITH AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER AS TO THE AVAILABILITY OF ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
Exhibit 10.1
Execution Version
PLEDGE AND SECURITY AGREEMENT
dated as of February 27, 2015
between
EACH OF THE GRANTORS PARTY HERETO
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Notes Collateral Trustee
TABLE OF CONTENTS
PAG
E
SECTION 1.
1.1
1.2
1.3
DEFINITIONS
2
General Definitions
Definitions; Interpretation
Intercreditor Agreement and Collateral Trust Agreement
2
10
11
GRANT OF SECURITY
11
Grant of Security
Certain Limited Exclusions
11
12
SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE
13
Security for Obligations
Continuing Liability Under Collateral
13
13
SECTION 4.
CERTAIN PERFECTION REQUIREMENTS
13
4.1
4.2
4.3
4.4
4.5
Delivery Requirements
Control Requirements
Intellectual Property Recording Requirements
Other Actions
Timing and Notice
13
14
15
15
16
SECTION 5.
REPRESENTATIONS AND WARRANTIES
16
Grantor Information and Status
Collateral Identification, Special Collateral
Ownership of Collateral and Absence of Other Liens
Status of Security Interest
Goods and Receivables
Pledged Equity Interests, Investment Related Property
Intellectual Property
16
17
17
18
18
19
20
COVENANTS AND AGREEMENTS
21
Grantor Information and Status
Collateral Identification; Special Collateral
Ownership of Collateral and Absence of Other Liens
Status of Security Interest
Goods and Receivables
Pledged Equity Interests, Investment Related Property
Intellectual Property
21
22
22
23
23
24
26
SECTION 2.
2.1
2.2
SECTION 3.
3.1
3.2
5.1
5.2
5.3
5.4
5.5
5.6
5.7
SECTION 6.
6.1
6.2
6.3
6.4
6.5
6.6
6.7
i
SECTION 7.
FURTHER ASSURANCES; ADDITIONAL GRANTORS
28
Further Assurances
Additional Grantors
28
29
NOTES COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT
30
Power of Attorney
No Duty on the Part of Notes Collateral Trustee or Secured Parties
Appointment Pursuant to Indenture and Collateral Trust Agreement
30
31
31
REMEDIES
31
9.1
9.2
9.3
9.4
9.5
9.6
9.7
Generally
Application of Proceeds
Sales on Credit
Investment Related Property
Grant of Intellectual Property License
Intellectual Property
Cash Proceeds; Deposit Accounts
31
33
33
33
33
34
36
SECTION 10.
NOTES COLLATERAL TRUSTEE
36
SECTION 11.
CONTINUING SECURITY INTEREST; TRANSFER OF NOTES; RELEASE
37
SECTION 12.
STANDARD OF CARE; NOTES COLLATERAL TRUSTEE MAY PERFORM
37
SECTION 13.
UNLIMITED LIABILITY COMPANIES
38
SECTION 14.
MISCELLANEOUS
39
7.1
7.2
SECTION 8.
8.1
8.2
8.3
SECTION 9.
SCHEDULE 5.1 — GENERAL INFORMATION
SCHEDULE 5.2 — COLLATERAL IDENTIFICATION
SCHEDULE 5.4 — FINANCING STATEMENTS
SCHEDULE 5.5 — LOCATION OF EQUIPMENT AND INVENTORY
EXHIBIT A — PLEDGE SUPPLEMENT
EXHIBIT B — UNCERTIFICATED SECURITIES CONTROL AGREEMENT
EXHIBIT C — SECURITIES ACCOUNT CONTROL AGREEMENT
ii
EXHIBIT D — DEPOSIT ACCOUNT CONTROL AGREEMENT
EXHIBIT E — TRADEMARK SECURITY AGREEMENT
EXHIBIT F — PATENT SECURITY AGREEMENT
EXHIBIT G — COPYRIGHT SECURITY AGREEMENT
iii
This PLEDGE AND SECURITY AGREEMENT , dated as of February 27, 2015 (as it may be amended, restated, supplemented or
otherwise modified from time to time, this “ Agreement ”), between Real Alloy Intermediate Holding, LLC, a Delaware limited liability
company (“ Holdings ”), Real Alloy Holding, Inc. (f/k/a SGH Acquisition Holdco, Inc. and a successor by merger to SGH Escrow
Corporation), a Delaware corporation (the “ Issuer ”), and each of the subsidiaries of Holdings or the Issuer party hereto from time to time,
whether as an original signatory hereto or as an Additional Grantor (as herein defined) (together with Holdings and the Issuer, each, a “
Grantor ”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as notes collateral trustee for the Secured Parties (as herein defined)
(in such capacity as notes collateral trustee, together with its successors and permitted assigns, the “ Notes Collateral Trustee ”).
RECITALS:
WHEREAS , reference is made to that certain Indenture, dated as of January 8, 2015 (as supplemented by the First Supplemental
Indenture, dated as of the date hereof (the “ Supplemental Indenture ”), and as may be further amended, restated, supplemented or otherwise
modified from time to time, the “ Indenture ”), by and among Holdings, the Issuer, the Subsidiary Guarantors (as therein defined), and
Wilmington Trust, National Association, as trustee (in such capacity, together with its successors and permitted assigns, the “ Trustee ”) and
the Notes Collateral Trustee.
WHEREAS , each Grantor is executing and delivering this Agreement, pursuant to the terms of the Indenture to induce the Trustee and
the Notes Collateral Trustee to enter into the Indenture and, pursuant to the terms of the Purchase Agreement dated as of December 23, 2014
among the Issuer, Goldman, Sachs & Co. and Deutsche Bank Securities Inc., as representatives of the purchasers named therein, to induce the
purchasers named therein to purchase the Notes;
WHEREAS , concurrently with the execution and delivery of the Supplemental Indenture, the Issuer, Holdings and the other Grantors
are entering into (i) the Revolving Credit Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “ North America ABL Credit Agreement ”) with the lenders from time to time party thereto and General Electric
Capital Corporation, as agent, (ii) the Intercreditor Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise
modified from time to time, the “ Intercreditor Agreement ”) with the Notes Collateral Trustee and General Electric Capital Corporation, as
agent and (iii) the Collateral Trust Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “ Collateral
Trust Agreement ”), dated as of the date hereof, with the Notes Collateral Trustee and the Trustee;
WHEREAS , in addition to the Indenture, subject to the terms and conditions of the Collateral Trust Agreement, certain Grantors may
enter into one or more other Pari Passu Lien Debt Documents (as defined therein) and Hedge Agreements (as defined therein) ; and
WHEREAS , in consideration of the extensions of credit and other accommodations of the Grantors as set forth in the Indenture and as
may be provided in the future pursuant to the other Pari Passu Lien Debt Documents and Hedge Agreements, each Grantor has agreed to secure
such Grantor’s obligations under the Indenture, the other Pari Passu Lien Debt Documents and Hedge Agreements as set forth herein.
NOW, THEREFORE , in consideration of the premises and the agreements, provisions and covenants herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Grantor and the Notes Collateral Trustee
agree as follows:
SECTION 1.
DEFINITIONS.
1.1 General Definitions . In this Agreement, the following terms shall have the following meanings:
“Acquisition Agreement ” shall mean the Purchase and Sale Agreement, dated as of October 17, 2014, by and among Aleris
Corporation, a Delaware corporation, Aleris International, Inc., a Delaware corporation, Aleris Holding Canada Limited, a corporation
organized under the laws of Canada, Aleris Aluminum Netherlands B.V., a limited liability company organized under the laws of the
Netherlands, Aleris Deutschland Holding GmbH, a limited liability company organized under the laws of Germany, Dutch Aluminum C.V., a
limited partnership organized under the laws of the Netherlands, and Aleris Deutschland Vier GmbH Co KG, a limited partnership organized
under the laws of Germany, SGH Acquisition Holdco, Inc., a Delaware corporation, Evergreen Holding Germany GmbH, a limited liability
company organized under the laws of Germany and Signature Group Holdings, Inc., a Delaware corporation.
“ Additional Grantors ” shall have the meaning assigned in Section 7.2 hereof.
“ Agreement ” shall have the meaning set forth in the preamble.
“ Aleris IMSAMET Partnership Interest ” shall mean the partnership interest in the Excluded Subsidiary owned by Aleris
Recycling.
“ Aleris Recycling ” shall mean Aleris Recycling, Inc., a Delaware corporation, to be known as Real Alloy Recycling, Inc. on the
Escrow Release Date.
“ Cash Proceeds ” shall have the meaning assigned in Section 9.7 hereof.
“ Collateral ” shall have the meaning assigned in Section 2.1 hereof.
“ Collateral Account ” shall mean any account established by the Notes Collateral Trustee.
“ Collateral Records ” shall mean books, records, ledger cards, files, correspondence, customer lists, supplier lists, blueprints,
technical specifications, manuals, computer software and related documentation, computer printouts, tapes, disks and other electronic storage
media and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral
or are otherwise necessary or helpful in the collection thereof or realization thereupon.
2
“ Collateral Support ” shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and
shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.
“ Collateral Trust Agreement ” shall have the meaning set forth in the recitals.
“ Control ” shall mean: (1) with respect to any Deposit Accounts, control within the meaning of Section 9-104 of the UCC, (2) with
respect to any Securities Accounts, Security Entitlements, Commodity Contract or Commodity Account, control within the meaning of
Section 9-106 of the UCC, (3) with respect to any Uncertificated Securities, control within the meaning of Section 8-106(c) of the UCC,
(4) with respect to any Certificated Security, control within the meaning of Section 8-106(a) or (b) of the UCC, (5) with respect to any
Electronic Chattel Paper, control within the meaning of Section 9-105 of the UCC, (6) with respect to Letter of Credit Rights, control within the
meaning of Section 9-107 of the UCC and (7) with respect to any “transferable record” (as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction), control within the meaning of Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or
in Section 16 of the Uniform Electronic Transactions Act as in effect in the jurisdiction relevant to such transferable record.
“ Copyright Licenses ” shall mean any and all agreements, licenses and covenants providing for the granting of any right in or to
any Copyright or otherwise providing for a covenant not to sue for infringement or other violation of any Copyright (whether such Grantor is
licensee or licensor thereunder) including, without limitation, each agreement required to be listed in Schedule 5.2(II) under the heading
“Copyright Licenses” (as such schedule may be amended or supplemented from time to time).
“ Copyrights ” shall mean all United States, and foreign copyrights (whether or not the underlying works of authorship have been
published), including but not limited to copyrights in software and all rights in and to databases, all designs (including but not limited to
industrial designs, Protected Designs within the meaning of 17 U.S.C. 1301 et. Seq. and Community designs), and all Mask Works (as defined
under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, as well as all moral rights, reversionary interests, and
termination rights, and, with respect to any and all of the foregoing: (i) all registrations and applications therefor including, without limitation,
the registrations and applications required to be listed in Schedule 5.2(II) under the heading “Copyrights” (as such schedule may be amended or
supplemented from time to time), (ii) all extensions and renewals thereof, (iii) the right to sue or otherwise recover for any past, present and
future infringement or other violation thereof, (iv) all Proceeds of the foregoing, including, without limitation, license fees, royalties, income,
payments, claims, damages and proceeds of suit now or hereafter due and/or payable with respect thereto, and (v) all other rights of any kind
accruing thereunder or pertaining thereto throughout the world.
“ Deposit Account Control Agreement ” shall have the meaning set forth in Section 4.2(a) hereof.
3
“ Discharge of Pari Passu Lien Obligations ” shall have the meaning set forth in the Collateral Trust Agreement.
“ Event of Default ” shall mean an “Event of Default” under (and as defined in) the Indenture and any “Event of Default” (or other
similar term) under (and as defined in) any other Pari Passu Lien Debt Documents.
“ Excluded Accounts ” shall mean any deposit account now or hereafter owned by the Issuer or any Grantor that is used solely by
the Issuer or such Grantor (a) as a payroll account so long as such payroll account is a zero balance account, (b) as a petty cash account so long
as the aggregate amount on deposit in all petty cash accounts of the Issuer and all Grantors does not exceed $50,000 at any one time for all such
deposit accounts combined, (c) commodity trading accounts or other brokerage accounts holding customary initial deposits and margin deposits
securing Hedging Obligations incurred in the ordinary course of business and not for speculative purposes, (d) to hold amounts required to be
paid in connection with workers compensation claims, unemployment insurance, social security benefits and other similar forms of
governmental insurance benefits, (e) to hold amounts which are required to be pledged or otherwise provided as security as required by law or
pension requirement, or (f) as a withholding tax or fiduciary account; provided , however , that, notwithstanding any of the foregoing to the
contrary, any deposit account that is not included in the definition of “Excluded Accounts” in the North America ABL Credit Agreement shall
also not be included in this definition.
“ Excluded Asset ” shall mean any asset of any Grantor excluded from the security interest hereunder by virtue of Section 2.2
hereof but only to the extent, and for so long as, so excluded thereunder.
“ Excluded Subsidiary ” shall mean IMSAMET of Arizona, an Arizona general partnership, 70% of whose partnership interest is
owned by Aleris Recycling, and 30% of whose partnership interest is owned by Magna Aluminum, Inc., a California corporation, until and
unless the Excluded Subsidiary becomes a wholly-owned subsidiary of a Grantor.
“ First-Tier Foreign Subsidiary ” means a Foreign Subsidiary more than 50% of the voting Capital Stock of which is directly
owned by a Grantor.
“ Governmental Authority ” shall mean any federal, state, municipal, national or other government, governmental department,
commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign entity or government.
“ Grantors ” shall have the meaning set forth in the preamble.
“ Holdings ” shall have the meaning set forth in the preamble.
“ Indenture ” shall have the meaning set forth in the recitals.
4
“ Indenture Documents ” shall mean (a) the Indenture, the Notes, the Collateral Trust Agreement, this Agreement and the other
Security Documents and (b) any other related documents or instruments executed and delivered pursuant to or in connection with the Indenture,
in each case, as such agreements may be amended, extended, renewed, restated, supplemented, waived, replaced, restructured, repaid, refunded,
refinanced or otherwise modified from time to time.
“ Insurance ” shall mean (i) all insurance policies covering any or all of the Collateral (regardless of whether the Notes Collateral
Trustee is the loss payee thereof) and (ii) any key man life insurance policies.
“ Intellectual Property ” shall mean, the collective reference to all rights, priorities and privileges relating to intellectual property,
whether arising under the United States, multinational or foreign laws or otherwise, including without limitation, Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, Trade Secrets, and Trade Secret Licenses, and the right to sue or
otherwise recover for any past, present and future infringement, dilution, misappropriation, or other violation or impairment thereof, including
the right to receive all Proceeds therefrom, including without limitation license fees, royalties, income, payments, claims, damages and
proceeds of suit, now or hereafter due and/or payable with respect thereto.
“ Intellectual Property Security Agreement ” shall mean each intellectual property security agreement executed and delivered by
the applicable Grantors, substantially in the form set forth in Exhibit E, Exhibit F and Exhibit G, as applicable.
“ Intercreditor Agreement ” shall have the meaning set forth in the recitals.
“ Investment Accounts ” shall mean the Collateral Account, Securities Accounts, Commodity Accounts and Deposit Accounts.
“ Investment Related Property ” shall mean: (i) all “investment property” (as such term is defined in Article 9 of the UCC) and
(ii) all of the following (regardless of whether classified as investment property under the UCC): all Pledged Equity Interests, Pledged Debt, the
Investment Accounts and certificates of deposit.
“ Issuer ” shall have the meaning set forth in the preamble.
“ Material Intellectual Property ” shall mean any Intellectual Property included in the Collateral that is material to the business of
any Grantor or is otherwise of material value.
“ Notes ” shall mean the $305,000,000 10.000% senior secured notes due 2019 issued under the Indenture, and any other senior
secured notes issued thereunder.
“ North America ABL Agent ” shall mean General Electric Capital Corporation, as the agent under the North America ABL
Credit Agreement.
“ North America ABL Credit Agreement ” shall have the meaning set forth in the recitals.
5
“ North America ABL Priority Collateral ” shall have the meaning assigned to such term in the Intercreditor Agreement.
“North America ABL Obligations” shall have the meaning assigned to such term in the Intercreditor Agreement.
“ Notes Collateral Trustee ” shall have the meaning set forth in the preamble.
“ Notes Priority Collateral ” shall have the meaning assigned to such term in the Intercreditor Agreement.
“ Obligations ” means all obligations of every nature of each Grantor (including obligations from time to time owed to the Trustee
or the Notes Collateral Trustee (including any former Trustee or Notes Collateral Trustee) or any holder of Notes) under any Indenture
Document and the Pari Passu Lien Obligations, whether for principal, premium, interest (including interest which, but for the filing of a
petition in bankruptcy with respect to such Grantor, would have accrued on any Obligation, whether or not a claim is allowed against such
Grantor for such interest in the related bankruptcy proceeding), fees, expenses, indemnification or any other amount due thereunder.
“ Patent Licenses ” shall mean all agreements, licenses and covenants providing for the granting of any right in or to any Patent or
otherwise providing for a covenant not to sue for infringement or other violation of any Patent (whether such Grantor is licensee or licensor
thereunder) including, without limitation, each agreement required to be listed in Schedule 5.2(II) under the heading “Patent Licenses” (as such
schedule may be amended or supplemented from time to time).
“ Patents ” shall mean all United States and foreign patents and certificates of invention, or similar industrial property rights, and
applications for any of the foregoing, including, without limitation: (i) each patent and patent application required to be listed in Schedule
5.2(II) under the heading “Patents” (as such schedule may be amended or supplemented from time to time), (ii) all reissues, divisions,
continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii) all patentable inventions and improvements thereto,
(iv) the right to sue or otherwise recover for any past, present and future infringement or other violation thereof, (v) all Proceeds of the
foregoing, including, without limitation, license fees, royalties, income, payments, claims, damages, and proceeds of suit now or hereafter due
and/or payable with respect thereto, and (vi) all other rights of any kind accruing thereunder or pertaining thereto throughout the world.
“ Pledge Supplement ” shall mean any supplement to this Agreement in substantially the form of Exhibit A.
“ Pledged Debt ” shall mean all indebtedness for borrowed money owed to any Grantor, whether or not evidenced by any
Instrument, including, without limitation, all indebtedness described on Schedule 5.2(I) under the heading “Pledged Debt” (as such schedule
may be amended or supplemented from time to time), issued by the obligors named therein, the instruments, if any, evidencing any of the
foregoing, and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the foregoing.
6
“ Pledged Equity Interests ” shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and any other
participation or interests in any equity or profits of any business entity owned by any Grantor including, without limitation, any trust and all
management rights relating to any entity whose equity interests are included as Pledged Equity Interests.
“ Pledged LLC Interests ” shall mean all interests in any limited liability company owned by any Grantor and each series thereof
including, without limitation, all limited liability company interests listed on Schedule 5.2(I) under the heading “Pledged LLC Interests” (as
such schedule may be amended or supplemented from time to time) and the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of such limited liability company or on the books and records of any
securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such
limited liability company interests and all rights as a member of the related limited liability company.
“ Pledged Partnership Interests ” shall mean all interests in any general partnership, limited partnership, limited liability
partnership or other partnership owned by an Grantor including, without limitation, if included in the Collateral, the Aleris IMSAMET
Partnership Interest and all other partnership interests listed on Schedule 5.2(I) under the heading “Pledged Partnership Interests” (as such
schedule may be amended or supplemented from time to time) and the certificates, if any, representing such partnership interests and any
interest of such Grantor on the books and records of such partnership or on the books and records of any securities intermediary pertaining to
such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and all rights as a
partner of the related partnership.
“ Pledged Stock ” shall mean all shares of Capital Stock of any corporation owned by any Grantor included in the Collateral,
including, without limitation, all shares of Capital Stock described on Schedule 5.2(I) under the heading “Pledged Stock” (as such schedule
may be amended or supplemented from time to time), and the certificates, if any, representing such shares and any interest of such Grantor in
the entries on the books of the issuer of such shares or on the books of any securities intermediary pertaining to such shares, and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares.
“ Pari Passu Lien Obligations ” shall mean, without duplication, (i) all Pari Passu Lien Obligations (as defined in the Collateral
Trust Agreement) and (ii) all Notes Obligations (as defined in the Indenture).
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“ Pari Passu Lien Debt Document ” shall have the meaning set forth in the Collateral Trust Agreement.
“ Pari Passu Lien Debt Representative ” shall have the meaning set forth in the Collateral Trust Agreement.
“ Pari Passu Lien Secured Parties ” shall have the meaning set forth in the Collateral Trust Agreement.
“ Receivables ” shall mean all rights to payment, whether or not earned by performance, for goods or other property sold, leased,
licensed, assigned or otherwise disposed of, or services rendered or to be rendered, including, without limitation all such rights constituting or
evidenced by any Account, Chattel Paper, Instrument, General Intangible or Investment Related Property, together with all of Grantor’s rights,
if any, in any goods or other property giving rise to such right to payment and all Collateral Support and Supporting Obligations related thereto
and all Receivables Records.
“ Receivables Records ” shall mean (i) all original copies of all documents, instruments or other writings or electronic records or
other Records evidencing the Receivables, (ii) all books, correspondence, credit or other files, Records, ledger sheets or cards, invoices, and
other papers relating to Receivables, including, without limitation, all tapes, cards, computer tapes, computer discs, computer runs, record
keeping systems and other papers and documents relating to the Receivables, whether in the possession or under the control of Grantor or any
computer bureau or agent from time to time acting for Grantor or otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments, supplements or other modifications thereto, notices to other
creditors, secured parties or agents thereof, and certificates, acknowledgments, or other writings, including, without limitation, lien search
reports, from filing or other registration officers, (iv) all credit information, reports and memoranda relating thereto and (v) all other written or
non-written forms of information related in any way to the foregoing or any Receivable.
“ Specified Assigned Agreement ” shall mean the Acquisition Agreement, as such agreement may be amended, supplemented or
otherwise modified from time to time.
“ Secured Obligations ” shall have the meaning assigned in Section 3.1 hereof.
“ Secured Parties ” shall mean (a) the Notes Collateral Trustee, (b) each Holder, (c) the Trustee, (c) each other Pari Passu Lien
Secured Party and (d) the successors, replacements and assigns of each of the foregoing, and shall include, without limitation, all former Notes
Collateral Trustees, Holders, Trustees and the Pari Passu Lien Secured Party to the extent that any Obligations owing to such Persons were
incurred while such Persons were Notes Collateral Trustee, Holder, Trustee or Pari Passu Lien Secured Party and such Obligations have not
been paid or satisfied in full.
“ Securities Account Control Agreement ” shall have the meaning set forth in Section 4.2(a) hereof.
“ Supplemental Indenture ” shall have the meaning set forth in the recitals.
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“ Trademark Licenses ” shall mean any and all agreements, licenses and covenants providing for the granting of any right in or to
any Trademark or otherwise providing for a covenant not to sue for infringement dilution or other violation of any Trademark or permitting
co-existence with respect to a Trademark (whether such Grantor is licensee or licensor thereunder) including, without limitation, each
agreement required to be listed in Schedule 5.2(II) under the heading “Trademark Licenses” (as such schedule may be amended or
supplemented from time to time).
“ Trademarks ” shall mean all United States, and foreign trademarks, trade names, trade dress, corporate names, company names,
business names, fictitious business names, Internet domain names, service marks, certification marks, collective marks, logos, other source or
business identifiers, designs and general intangibles of a like nature, whether or not registered, and with respect to any and all of the foregoing:
(i) all registrations and applications therefor including, without limitation, the registrations and applications required to be listed in Schedule
5.2(II) under the heading “Trademarks”(as such schedule may be amended or supplemented from time to time), (ii) all extensions or renewals
of any of the foregoing, (iii) all of the goodwill of the business connected with the use of and symbolized by any of the foregoing, (iv) the right
to sue or otherwise recover for any past, present and future infringement, dilution or other violation of any of the foregoing or for any injury to
the related goodwill, (v) all Proceeds of the foregoing, including, without limitation, license fees, royalties, income, payments, claims,
damages, and proceeds of suit now or hereafter due and/or payable with respect thereto, and (vi) all other rights of any kind accruing
thereunder or pertaining thereto throughout the world.
“ Trade Secret Licenses ” shall mean any and all agreements providing for the granting of any right in or to Trade Secrets (whether
such Grantor is licensee or licensor thereunder) including, without limitation, each agreement required to be listed in Schedule 5.2(II) under the
heading “Trade Secret Licenses” (as such schedule may be amended or supplemented from time to time).
“ Trade Secrets ” shall mean all trade secrets and all other confidential or proprietary information and know-how whether or not
the foregoing has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring
in any way to the foregoing, and with respect to any and all of the foregoing: (i) the right to sue or otherwise recover for any past, present and
future misappropriation or other violation thereof, (ii) all Proceeds of the foregoing, including, without limitation, license fees, royalties,
income, payments, claims, damages, and proceeds of suit now or hereafter due and/or payable with respect thereto; and (iii) all other rights of
any kind accruing thereunder or pertaining thereto throughout the world.
“ Trustee ” shall have the meaning set forth in the recitals.
“ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided , however ,
that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of, or remedies with respect to, any
Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term
“UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions
hereof relating to such perfection, priority or remedies.
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“ ULC Legislation ” shall have the meaning assigned in Section 13 hereof.
“ United States ” shall mean the United States of America.
“ Unlimited Company ” means any unlimited company, unlimited liability company or unlimited liability corporation incorporated
or otherwise constituted or continued under the laws of the Province of Alberta, the Province of British Columbia or the Province of Nova
Scotia, or any similar body corporate or other business entity formed under the laws of any other jurisdiction whose members, shareholders or
other equity holders are, or may at any time become, responsible for any of the obligations of that entity whether such responsibility is to the
entity or any creditor of the entity or any other person.
“ Unlimited Liability Securities ” means securities, other equity interests or security entitlements relating thereto in an Unlimited
Company.
1.2 Definitions; Interpretation .
(a) In this Agreement, the following capitalized terms shall have the meaning given to them in the UCC (and, if defined in more
than one Article of the UCC, shall have the meaning given in Article 9 thereof): Account, Account Debtor, As-Extracted Collateral, Bank,
Certificated Security, Chattel Paper, Commercial Tort Claims, Commodity Account, Commodity Contract, Commodity Intermediary,
Consignee, Consignment, Consignor, Deposit Account, Document, Entitlement Order, Electronic Chattel Paper, Equipment, Farm Products,
Fixtures, General Intangibles, Goods, Health-Care-Insurance Receivable, Instrument, Inventory, Investment Property, Letter of Credit Right,
Manufactured Home, Money, Payment Intangible, Proceeds, Record, Securities Account, Securities Intermediary, Security Certificate, Security
Entitlement, Supporting Obligations, Tangible Chattel Paper and Uncertificated Security.
(b) All other capitalized terms used herein (including the preamble and recitals hereto) and not otherwise defined herein shall have
the meanings ascribed thereto in the Indenture. The incorporation by reference of terms defined in the Indenture shall survive any termination
of the Indenture until this Agreement is terminated as provided in Section 11 hereof. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or
Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use
herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or
not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or
matter. The terms lease and license shall include sub-lease and sub-license, as applicable. If any conflict or inconsistency exists between this
Agreement and the Indenture, the Indenture shall govern. All references herein to provisions of the UCC shall include all successor provisions
under any subsequent version or amendment to any Article of the UCC.
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1.3 Intercreditor Agreement and Collateral Trust Agreement . Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Notes Collateral Trustee pursuant to this Agreement and the exercise of any right or remedy by Notes Collateral Trustee
hereunder are subject to the provisions of the Intercreditor Agreement and the Collateral Trust Agreement, from time to time. In the event of
any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and
control. In the event of any conflict between the terms of the Collateral Trust Agreement and this Agreement, the terms of the Collateral Trust
Agreement shall govern and control.
SECTION 2.
GRANT OF SECURITY.
2.1 Grant of Security . Each Grantor hereby grants to the Notes Collateral Trustee, for the benefit of the Secured Parties, a security
interest in and continuing lien on all of such Grantor’s right, title and interest in, to and under all personal property of such Grantor including,
but not limited to the following, in each case whether now or hereafter existing or in which any Grantor now has or hereafter acquires an
interest and wherever the same may be located (all of which being hereinafter collectively referred to as the “ Collateral ”):
(a) Accounts;
(b) Chattel Paper;
(c) Documents;
(d) General Intangibles;
(e) Goods (including, without limitation, Inventory and Equipment);
(f) Instruments;
(g) Insurance;
(h) Intellectual Property;
(i) Investment Related Property (including, without limitation, Deposit Accounts);
(j) Letter of Credit Rights;
(k) Money;
(l) Receivables and Receivable Records;
(m) Commercial Tort Claims now or hereafter described on Schedule 5.2;
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(n) the Specified Assigned Agreement, including, without limitation, (i) all rights of such Grantor to receive moneys due and to
become due under or pursuant to the Specified Assigned Agreement, (ii) all rights of such Grantor to receive proceeds of any insurance, bond,
indemnity, warranty or guaranty with respect to the Specified Assigned Agreement, (iii) all claims of such Grantor for damages arising out of
or for breach of or default under the Specified Assigned Agreement and (iv) all rights of such Grantor to terminate, amend, supplement, modify
or waive performance under the Specified Assigned Agreement, to perform thereunder and to compel performance and otherwise to exercise all
remedies thereunder;
(o) to the extent not otherwise included above, all other personal property of any kind and all Collateral Records, Collateral Support
and Supporting Obligations relating to any of the foregoing; and
(p) to the extent not otherwise included above, all Proceeds, products, accessions, rents and profits of or in respect of any of the
foregoing.
2.2 Certain Limited Exclusions . Notwithstanding anything herein to the contrary, in no event shall the Collateral include or the security
interest granted under Section 2.1 hereof attach to
(a) any lease, license, contract or agreement to which any Grantor is a party, and any of its rights or interest thereunder, if and to the
extent that a security interest is prohibited by or in violation of (i) any law, rule or regulation applicable to such Grantor, or (ii) a term,
provision or condition of any such lease, license, contract or agreement (unless such law, rule, regulation, term, provision or condition would
be rendered ineffective with respect to the creation of the security interest hereunder pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or
principles of equity); provided however that the Collateral shall include any such lease, license, contract or agreement, and any of such
Grantor’s rights or interest thereunder (and such security interest shall attach) immediately at such time as the contractual or legal prohibition
shall no longer be applicable and to the extent severable, shall attach immediately to any portion of such lease, license, contract or agreement
not subject to the prohibitions specified in (i) or (ii) above; provided further that the exclusions referred to in clause (a) of this Section 2.2 shall
not include any Proceeds of any such lease, license, contract or agreement;
(b) in any of the outstanding Capital Stock of a First-Tier Foreign Subsidiary in excess of 65% of the voting power of all classes of
Capital Stock of such First-Tier Foreign Subsidiary entitled to vote;
(c) any “intent-to-use” application for registration of a Trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051,
prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to
Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any, that, and solely during the period, if any, in which, the grant of
a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use application under
applicable federal law;
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(c) assets and properties of the Excluded Subsidiary;
(d) Capital Stock of the Excluded Subsidiary, to the extent the pledge of such Capital Stock would violate the Excluded Subsidiary’s
partnership agreement or require the consent of Magna Aluminum, Inc., a California corporation. (or any subsequent holder of such Capital
Stock other than the Issuer and Guarantor) that has not been obtained; or
(d) Excluded Accounts.
SECTION 3.
SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.
3.1 Security for Obligations . This Agreement secures, and the Collateral is collateral security for, the prompt and complete payment or
performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, redemption, demand or otherwise
(including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. §362(a) (and any successor provision thereof)), of all Obligations (the “ Secured Obligations ”).
3.2 Continuing Liability Under Collateral . Notwithstanding anything herein to the contrary, (i) each Grantor shall remain liable for all
obligations under the Collateral and nothing contained herein is intended or shall be a delegation of duties to the Notes Collateral Trustee or
any other Secured Party, (ii) each Grantor shall remain liable under each of the agreements included in the Collateral, including, without
limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it
thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the Notes Collateral Trustee nor any Secured
Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other document
related thereto nor shall the Notes Collateral Trustee nor any Secured Party have any obligation to make any inquiry as to the nature or
sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement
included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, and
(iii) the exercise by the Notes Collateral Trustee of any of its rights hereunder shall not release any Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral.
SECTION 4.
CERTAIN PERFECTION REQUIREMENTS
4.1 Delivery Requirements .
(a) With respect to any Certificated Securities included in the Collateral, each Grantor shall deliver to the Notes Collateral Trustee
the Security Certificates evidencing such Certificated Securities duly indorsed by an effective indorsement (within the meaning of
Section 8-107 of the UCC), or accompanied by share transfer powers or other instruments of transfer duly endorsed by such an effective
endorsement, in each case, to the Notes Collateral Trustee or in blank. In addition, each Grantor shall cause any certificates evidencing any
Pledged Equity Interests, including, without limitation, any Pledged Partnership Interests or Pledged LLC Interests, to be similarly delivered to
the Notes Collateral Trustee regardless of whether such Pledged Equity Interests constitute Certificated Securities.
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(b) With respect to any Instruments or Tangible Chattel Paper included in the Collateral, each Grantor shall deliver all such
Instruments or Tangible Chattel Paper to the Notes Collateral Trustee or the North America ABL Agent, as applicable, in accordance with the
Intercreditor Agreement, duly indorsed in blank.
4.2 Control Requirements .
(a) With respect to any Deposit Accounts, Securities Accounts, Security Entitlements, Commodity Accounts and Commodity
Contracts included in the Collateral, each Grantor shall ensure that the Notes Collateral Trustee has Control thereof. With respect to any
Securities Accounts or Securities Entitlements, such Control shall be accomplished by the Grantor causing the Securities Intermediary
maintaining such Securities Account or Security Entitlement to enter into an agreement substantially in the form of Exhibit C hereto (or such
other agreement of that type, including an agreement to which the North America ABL Agent is also a party) pursuant to which the Securities
Intermediary shall agree to comply with the Notes Collateral Trustee’s Entitlement Orders without further consent by such Grantor (the “
Securities Account Control Agreement ”). With respect to any Deposit Account, each Grantor shall cause the depositary institution
maintaining such account to enter into an agreement substantially in the form of Exhibit D hereto (or such other agreement of that type,
including an agreement to which the North America ABL Agent is also a party), pursuant to which the Bank shall agree to comply with the
Notes Collateral Trustee’s instructions with respect to disposition of funds in the Deposit Account without further consent by such Grantor (the
“ Deposit Account Control Agreement ”). With respect to any Commodity Accounts or Commodity Contracts each Grantor shall cause
Control in favor of the Notes Collateral Trustee (subject to the Intercreditor Agreement).
(b) With respect to any Uncertificated Security included in the Collateral (other than any Unlimited Liability Securities or
Uncertificated Securities credited to a Securities Account), each Grantor shall cause the issuer of such Uncertificated Security to either
(i) register the Notes Collateral Trustee as the registered owner thereof on the books and records of the issuer or (ii) execute an agreement
substantially in the form of Exhibit B hereto (or such other agreement of that type, including an agreement to which the North America ABL
Agent is also a party), pursuant to which such issuer agrees to comply with the Notes Collateral Trustee’s instructions with respect to such
Uncertificated Security without further consent by such Grantor.
(c) With respect to any material Letter of Credit Rights included in the Collateral (other than any Letter of Credit Rights
constituting a Supporting Obligation for a Receivable in which the Notes Collateral Trustee has a valid and perfected security interest), Grantor
shall ensure that Notes Collateral Trustee has Control thereof by obtaining the written consent of each issuer of each related letter of credit to
the assignment of the proceeds of such letter of credit to the Notes Collateral Trustee or the North America ABL Agent, as applicable, in
accordance with the Intercreditor Agreement.
(d) With respect to any Electronic Chattel Paper or “transferable record”(as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction) included in the Collateral, Grantor shall ensure that the Notes Collateral Trustee has Control thereof (subject to the
Intercreditor Agreement).
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4.3 Intellectual Property Recording Requirements .
(a) In the case of any Collateral (whether now owned or hereafter acquired) consisting of issued U.S. Patents and applications
therefor, each Grantor shall execute and deliver to the Notes Collateral Trustee a Patent Security Agreement in substantially the form of Exhibit
F hereto (or a supplement thereto) covering all such Patents in appropriate form for recordation with the U.S. Patent and Trademark Office with
respect to the security interest of the Notes Collateral Trustee.
(b) In the case of any Collateral (whether now owned or hereafter acquired) consisting of registered U.S. Trademarks and
applications therefor, each Grantor shall execute and deliver to the Notes Collateral Trustee a Trademark Security Agreement in substantially
the form of Exhibit E hereto (or a supplement thereto) covering all such Trademarks in appropriate form for recordation with the U.S. Patent
and Trademark Office with respect to the security interest of the Notes Collateral Trustee.
(c) In the case of any Collateral (whether now owned or hereafter acquired) consisting of registered U.S. Copyrights and exclusive
Copyright Licenses in respect of registered U.S. Copyrights for which any Grantor is the licensee, each Grantor shall execute and deliver to the
Notes Collateral Trustee a Copyright Security Agreement in substantially the form of Exhibit G hereto (or a supplement thereto) covering all
such Copyrights and Copyright Licenses in appropriate form for recordation with the U.S. Copyright Office with respect to the security interest
of the Notes Collateral Trustee.
4.4 Other Actions .
If any issuer of any Pledged Equity Interest is organized under a jurisdiction outside of the United States, each Grantor shall take such
additional customary actions, including, without limitation, causing the issuer to register the pledge on its books and records or making such
filings or recordings, in each case as may be necessary or advisable, under the laws of such issuer’s jurisdiction to ensure the validity,
perfection and priority of the security interest of the Notes Collateral Trustee.
With respect to any Pledged Partnership Interests and Pledged LLC Interests included in the Collateral, if the Grantors own less than
100% of the equity interests in any issuer of such Pledged Partnership Interests or Pledged LLC Interests, Grantors shall use their commercially
reasonable efforts to obtain the consent of each other holder of partnership interest or limited liability company interests in such issuer to the
security interest of the Notes Collateral Trustee hereunder and following an Event of Default, the transfer of such Pledged Partnership Interests
and Pledged LLC Interests to the Notes Collateral Trustee of its designee, and to the substitution of the Notes Collateral Trustee or its designee
as a partner or member with all the rights and powers related thereto. Each Grantor consents to the grant by each other Grantor of a Lien in all
Investment Related Property to the Notes Collateral Trustee and without limiting the generality of the foregoing consents to the transfer of any
Pledged Partnership Interest and any Pledged
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LLC Interest to the Notes Collateral Trustee or its designee following and during the continuance of an Event of Default and to the substitution
of the Notes Collateral Trustee or its designee as a partner in any partnership or as a member in any limited liability company with all the rights
and powers related thereto.
Each Grantor shall ensure that any Unlimited Liability Securities included in the Collateral are Certificated Securities.
4.5 Timing and Notice . With respect to any Collateral in existence on the Issue Date, each Grantor shall comply with the requirements
of Section 4 on the date hereof and, with respect to any Collateral hereafter owned or acquired, such Grantor shall comply with such
requirements within 20 (twenty) days of Grantor acquiring rights therein. Each Grantor shall promptly inform the Notes Collateral Trustee of
its acquisition of any Collateral for which any action is required by Section 4 hereof (including, for the avoidance of doubt, the filing of any
applications for, or the issuance or registration of, any Patents, Copyrights or Trademarks).
SECTION 5.
REPRESENTATIONS AND WARRANTIES.
Each Grantor hereby represents and warrants, on the date hereof and on the date of each Collateral Trust Joinder (as defined in the
Collateral Trust Agreement), that:
5.1 Grantor Information and Status .
(a) Schedule 5.1(A) and (B) (as such schedule may be amended or supplemented from time to time with notice to, but without any
action by or consent required from, the Notes Collateral Trustee) sets forth under the appropriate headings: (1) the full legal name of such
Grantor, (2) all trade names or other names under which such Grantor currently conducts business, (3) the type of organization of such Grantor,
(4) the jurisdiction of organization of such Grantor, (5) its organizational identification number, if any, and (6) the jurisdiction where the chief
executive office or its sole place of business (or the principal residence if such Grantor is a natural person) is located.
(b) except as provided on Schedule 5.1(C), it has not changed its name, jurisdiction of organization, chief executive office or sole
place of business (or principal residence if such Grantor is a natural person) or its corporate structure in any way (e.g., by merger,
consolidation, change in corporate form or otherwise) and has not done business under any other name, in each case, within the past five
(5) years;
(c) it has not within the last five (5) years become bound (whether as a result of merger or otherwise) as debtor under a security
agreement entered into by another Person, which has not heretofore been terminated;
(d) such Grantor has been duly organized and is validly existing as an entity of the type as set forth opposite such Grantor’s name
on Schedule 5.1(A) solely under the laws of the jurisdiction as set forth opposite such Grantor’s name on Schedule 5.1(A) and remains duly
existing as such. Such Grantor has not filed any certificates of dissolution or liquidation, any certificates of domestication, transfer or
continuance in any other jurisdiction; and
(e) no Grantor is a “transmitting utility” (as defined in Section 9-102(a)(80) of the UCC).
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5.2 Collateral Identification, Special Collateral .
(a) Schedule 5.2 (as such schedule may be amended or supplemented from time to time with notice to, but without any action by or
consent required from, the Notes Collateral Trustee) sets forth under the appropriate headings all of such Grantor’s: (1) Pledged Equity
Interests, (2) Pledged Debt, (3) Securities Accounts, (5) Commodity Contracts and Commodity Accounts, (6) United States and foreign
registrations and issuances of and applications for Patents, Trademarks, and Copyrights owned by each Grantor, (7) Patent Licenses,
Trademark Licenses, Trade Secret Licenses and Copyright Licenses constituting Material Intellectual Property, (8) Commercial Tort Claims,
(9) Letter of Credit Rights for letters of credit, and (10) the name and address of any warehouseman, bailee or other third party in possession of
any Inventory, Equipment and other tangible personal property;
(b) none of the Collateral constitutes, or is the Proceeds of, (1) Farm Products, (2) As-Extracted Collateral, (3) Manufactured
Homes, (4) Health-Care-Insurance Receivables; (5) timber to be cut, or (6) aircraft, aircraft engines, satellites, ships or railroad rolling stock.
No material portion of the collateral consists of motor vehicles or other goods subject to a certificate of title statute of any jurisdiction;
(c) all information supplied by any Grantor with respect to any of the Collateral (in each case taken as a whole with respect to any
particular Collateral) is accurate and complete in all material respects;
(d) not more than 10% of the value of all personal property included in the Collateral is located in any country other than the United
States; and
(e) no Excluded Asset is material to the business of such Grantor.
5.3 Ownership of Collateral and Absence of Other Liens .
(a) it owns the Collateral purported to be owned by it or otherwise has the rights it purports to have in each item of Collateral and,
as to all Collateral whether now existing or hereafter acquired, developed or created (including by way of lease or license), will continue to
own or have such rights in each item of the Collateral (except as otherwise permitted by the Indenture, any other Pari Passu Lien Debt
Document, the Collateral Trust Agreement and the Intercreditor Agreement), in each case free and clear of any and all Liens, rights or claims of
all other Persons, including, without limitation, liens arising as a result of such Grantor becoming bound (as a result of merger or otherwise) as
debtor under a security agreement entered into by another Person other than, in the case of priority only, Liens on North America ABL Priority
Collateral securing North America ABL Obligations, Permitted Notes Collateral Liens and Permitted Liens; and
(b) other than any financing statements filed in favor of the Notes Collateral Trustee, no effective financing statement, fixture filing
or other instrument similar in effect under any applicable law covering all or any part of the Collateral is on file in any filing or recording
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office except for (x) financing statements for which duly authorized proper termination statements have been prepared for filing by the Grantor
and (y) financing statements filed in connection with Liens securing North America ABL Obligations, Permitted Notes Collateral Liens and
Permitted Liens. Other than the Notes Collateral Trustee, the North America ABL Agent and any automatic control in favor of a Bank,
Securities Intermediary or Commodity Intermediary maintaining a Deposit Account, Securities Account or Commodity Contract, no Person is
in Control of any Collateral.
5.4 Status of Security Interest .
(a) upon the filing of financing statements naming each Grantor as “debtor” and the Notes Collateral Trustee as “secured party” and
describing the Collateral in the filing offices set forth opposite such Grantor’s name on Schedule 5.4 hereof (as such schedule may be amended
or supplemented from time to time), the security interest of the Notes Collateral Trustee in all Collateral that can be perfected by the filing of a
financing statement under the Uniform Commercial Code as in effect in any jurisdiction will constitute a valid, perfected, first priority Lien in
such Collateral, subject in the case of priority only, to any Permitted Notes Collateral Liens, Permitted Liens, and Liens on North America ABL
Priority Collateral securing North America ABL Obligations. Each agreement purporting to give the Notes Collateral Trustee Control over any
Collateral is effective to establish the Notes Collateral Trustee’s Control of the Collateral subject thereto and the Intercreditor Agreement;
(b) to the extent perfection or priority of the security interest therein is not subject to Article 9 of the UCC, upon recordation of the
security interests granted hereunder in registered Patents, registered Trademarks, registered Copyrights and exclusive Copyright Licenses in the
applicable intellectual property registries, including but not limited to the United States Patent and Trademark Office and the United States
Copyright Office, the security interests granted hereunder to the Notes Collateral Trustee hereunder shall constitute valid, perfected, first
priority Liens (subject, in the case of priority only, to Permitted Notes Collateral Liens, Permitted Liens and Liens on North America ABL
Priority Collateral securing North America ABL Obligations);
(c) no authorization, consent, approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory
body or any other Person is required for either (i) the pledge or grant by any Grantor of the Liens purported to be created in favor of the Notes
Collateral Trustee hereunder or (ii) subject to the Intercreditor Agreement and the Collateral Trust Agreement, the exercise by Notes Collateral
Trustee of any rights or remedies in respect of any Collateral (whether specifically granted or created hereunder or created or provided for by
applicable law), except (A) for the filings contemplated by clause (a) and clause (b) above, and (B) as may be required, in connection with the
disposition of any Investment Related Property, by laws generally affecting the offering and sale of Securities; and
(d) each Grantor is in compliance with its obligations under Section 4 hereof.
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5.5 Goods and Receivables .
(a) each Receivable (a) is and will be the legal, valid and binding obligation of the Account Debtor in respect thereof, representing
an unsatisfied obligation of such Account Debtor, (b) is and will be enforceable in accordance with its terms, (c) to the best of the knowledge of
each Grantor, is not and will not be subject to any credits, rights of recoupment, setoffs, defenses, taxes, counterclaims (except with respect to
refunds, returns and allowances in the ordinary course of business with respect to damaged merchandise) and (d) to the best of the knowledge
of each Grantor, is and will be in compliance with all applicable laws, whether federal, state, local or foreign;
(b) none of the Account Debtors in respect of any Receivable is the government of the United States, any agency or instrumentality
thereof, any state or municipality or any foreign sovereign. No Receivable requires the consent of the Account Debtor in respect thereof in
connection with the security interest hereunder, except any consent which has been obtained;
(c) no Goods now or hereafter produced by any Grantor and included in the Collateral have been or will be produced in violation of
the requirements of the Fair Labor Standards Act, as amended, or the rules and regulations promulgated thereunder; and
(d) other than any Inventory or Equipment in transit, all of the Equipment and Inventory included in the Collateral is located only at
the locations specified in Schedule 5.5 (as such schedule may be amended or supplemented from time to time).
5.6 Pledged Equity Interests, Investment Related Property .
(a) it is the record and beneficial owner of the Pledged Equity Interests free of all Liens, rights or claims of other Persons (other
than, subject to the Intercreditor Agreement, the North America ABL Agent) and the Permitted Notes Collateral Liens and there are no
outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale of, any Pledged Equity Interests;
(b) except with respect to the pledge of the Aleris IMSAMET Partnership Interest, no consent of any Person, including any other
general or limited partner, any other member of a limited liability company, any other shareholder or any other trust beneficiary, is necessary or
desirable in connection with the creation, perfection or first priority status of the security interest of the Notes Collateral Trustee in any Pledged
Equity Interests or the exercise by the Notes Collateral Trustee of the voting or other rights provided for in this Agreement or the exercise of
remedies in respect thereof except such as have been obtained; and
(c) all of the Pledged LLC Interests (other than the Pledged LLC interests in First-Tier Foreign Subsidiaries) and Pledged
Partnership Interests (other than the Aleris IMSAMET Partnership Interest) represent interests that by their terms provide that they are
securities governed by the uniform commercial code of an applicable jurisdiction.
(d) The Aleris IMSAMET Partnership Interest does not represent interest (1) that by its terms provides that it is securities governed
by the uniform commercial code of an applicable jurisdiction, (2) that is dealt in or traded on securities exchanges or markets or (3) in issuers
that are registered as investment companies.
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5.7 Intellectual Property .
(a) it is the sole and exclusive owner of the entire right, title, and interest in and to all Intellectual Property listed on Schedule 5.2(II)
(as such schedule may be amended or supplemented from time to time), and owns or has the valid right to use and, where such Grantor does so,
sublicense others to use, all other Intellectual Property used in or necessary to conduct its business, free and clear of all Liens, claims and
licenses, except for, in the case of priority only, Permitted Notes Collateral Liens, Permitted Liens, Liens on North America ABL Priority
Collateral securing North America ABL Obligations and the licenses set forth on Schedule 5.2(II) (as such schedule may be amended or
supplemented from time to time);
(b) all Material Intellectual Property of such Grantor is subsisting and has not been adjudged invalid or unenforceable, in whole or
in part, nor, in the case of Patents, is any of the Intellectual Property of such Grantor the subject of a reexamination proceeding, and except as
set forth on Schedule 5.2(II) , such Grantor has performed all acts and has paid all renewal, maintenance, and other fees and taxes required to
maintain each and every registration and application of Copyrights, Patents and Trademarks of such Grantor constituting Material Intellectual
Property in full force and effect;
(c) no holding, decision, ruling, or judgment has been rendered in any action or proceeding before any court or administrative
authority challenging the validity, enforceability, or scope of, or such Grantor’s right to register, own or use, any Intellectual Property of such
Grantor, and no such action or proceeding is pending or, to the best of such Grantor’s knowledge, threatened;
(d) all registrations, issuances and applications for Copyrights, Patents and Trademarks of such Grantor are standing in the name of
such Grantor, and none of the Trademarks, Patents, Copyrights or Trade Secrets owned by such Grantor has been licensed by such Grantor to
any Affiliate or third party, except as disclosed in Schedule 5.2(II) (as such schedule may be amended or supplemented from time to time), and
all exclusive Copyright Licenses constituting Material Intellectual Property respect of registered Copyrights have been properly recorded in the
U.S. Copyright Office or, where appropriate, any foreign counterpart;
(e) all Copyrights owned by such Grantor that are material to the business of such Grantor or are otherwise of material value have
been registered with the United States Copyright Office or, where appropriate, any foreign counterpart.
(f) such Grantor has not made a previous assignment, sale, transfer, exclusive license, or similar arrangement constituting a present
or future assignment, sale, transfer, exclusive license or similar arrangement of any Material Intellectual Property that has not been terminated
or released;
(g) such Grantor has been using appropriate statutory notice of registration in connection with its use of the Material Intellectual
Property owned by such Grantor to the extent necessary to protect such Material Intellectual Property;
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(h) such Grantor has taken commercially reasonable steps to protect the confidentiality of its Trade Secrets in accordance with
industry standards;
(i) such Grantor controls the nature and quality in accordance with industry standards of all products sold and all services rendered
under or in connection with all Trademarks of such Grantor, in each case consistent with industry standards, and has taken all action necessary
to insure that all licensees of the Trademarks owned by such Grantor comply with such Grantor’s standards of quality, in each case, to the
extent constituting Material Intellectual Property;
(j) the conduct of such Grantor’s business does not infringe, misappropriate, dilute or otherwise violate any Intellectual Property
right of any other Person; no claim has been made that the use of any Material Intellectual Property owned or used by such Grantor (or any of
its respective licensees) infringes, misappropriates, dilutes or otherwise violates the asserted rights of any other Person, and no demand that
such Grantor enter into a license or co-existence agreement has been made but not resolved;
(k) to the best of such Grantor’s knowledge, no Person is infringing, misappropriating, diluting or otherwise violating any rights in
any Material Intellectual Property owned, licensed or used by such Grantor, including any such Material Intellectual Property licensed by such
Grantor to any of its licensees; and
(l) no settlement or consents, covenants not to sue, co-existence agreements, non-assertion assurances, or releases have been entered
into by such Grantor or bind such Grantor in a manner that could adversely affect such Grantor’s rights to own, license or use any Material
Intellectual Property.
SECTION 6.
COVENANTS AND AGREEMENTS.
Each Grantor hereby covenants and agrees that:
6.1 Grantor Information and Status .
(a) Without limiting any prohibitions or restrictions on mergers or other transactions set forth in the Indenture or any other Pari
Passu Lien Debt Document, it shall not change such Grantor’s name, identity, corporate structure (e.g. by merger, consolidation, change in
corporate form or otherwise), sole place of business (or principal residence if such Grantor is a natural person), chief executive office,
organizational identification number, type of organization or jurisdiction of organization or establish any trade names unless it shall have
(a) notified the Notes Collateral Trustee in writing at least thirty (30) days (or five (5) Business Days in the case of name changes required to be
implemented pursuant to the Acquisition Agreement within 90 days after the Closing Date and one (1) Business Day in the case of the
amalgamation of Real Alloy Canada Company and Aleris Specification Alloy Products Canada Company as one company under the name Real
Alloy Canada Ltd. and the merger of Real Alloy Mexico S. de R.L. de C.V. with Aleris Nuevo Leon S. de R.L. de C.V, with Real Alloy
Mexico S. de R.L. de C.V. surviving the merger under the name of Real Alloy Mexico S. de R.L. de C.V.) prior to any such change or
establishment, identifying such new proposed name, identity, corporate structure, sole place of business (or principal residence if such Grantor
is a natural person), chief executive
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office, jurisdiction of organization or trade name and providing such other information in connection therewith as the Notes Collateral Trustee
may reasonably request and (b) taken all actions necessary or advisable to maintain the continuous validity, perfection and the same or better
priority of the Notes Collateral Trustee’s security interest in the Collateral granted or intended to be granted and agreed to hereby, which in the
case of any merger or other change in corporate structure shall include, without limitation, executing and delivering to the Notes Collateral
Trustee a completed Pledge Supplement together with all Supplements to Schedules thereto (with notice to but without any action by the Notes
Collateral Trustee), upon completion of such merger or other change in corporate structure confirming the grant of the security interest
hereunder.
6.2 Collateral Identification; Special Collateral .
(a) in the event that it hereafter acquires any Collateral of a type described in Section 5.2(b) hereof, it shall promptly notify the
Notes Collateral Trustee thereof in writing and take such actions and execute such documents and make such filings all at Grantor’s expense as
may be necessary, or as the Notes Collateral Trustee may reasonably request in order to ensure that the Notes Collateral Trustee has a valid,
perfected, first priority security interest in such Collateral, subject in the case of priority only to the Permitted Notes Collateral Liens, Permitted
Liens and Liens on North America ABL Priority Collateral securing North America ABL Obligations. Notwithstanding the foregoing, no
Grantor shall be required to notify the Notes Collateral Trustee or take any such action unless such Collateral is of a material value or is
material to such Grantor’s business.
(b) in the event that it hereafter acquires or has any Commercial Tort Claim it shall deliver to the Notes Collateral Trustee a
completed Pledge Supplement together with all Supplements to Schedules thereto (with notice to but without any action by or consent from the
Notes Collateral Trustee), identifying such new Commercial Tort Claims.
6.3 Ownership of Collateral and Absence of Other Liens .
(a) except for the security interest created by this Agreement, it shall not create or suffer to exist any Lien upon or with respect to
any of the Collateral, other than Permitted Notes Collateral Liens, Permitted Liens and, subject to the Intercreditor Agreement, Liens securing
North America ABL Obligations, and such Grantor shall defend the Collateral against all Persons at any time claiming any interest therein;
(b) upon such Grantor or any officer of such Grantor obtaining knowledge thereof, it shall promptly notify the Notes Collateral
Trustee in writing of any event that may have a material adverse effect on the value of the Collateral or any portion thereof, the ability of any
Grantor or the Notes Collateral Trustee to dispose of the Collateral or any portion thereof, or the rights and remedies of the Notes Collateral
Trustee in relation thereto, including, without limitation, the levy of any legal process against the Collateral or any portion thereof; and
(c) it shall not sell, transfer or assign (by operation of law or otherwise) or exclusively license to another Person any Collateral
except as otherwise permitted by the Indenture, any other Pari Passu Lien Debt Document, the Collateral Trust Agreement or the Intercreditor
Agreement.
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6.4 Status of Security Interest .
(a) subject to the limitations set forth in subsection (b) of this Section 6.4, each Grantor shall maintain the security interest of the
Notes Collateral Trustee hereunder in all Collateral as valid, perfected, first priority Liens (subject, in the case of priority only, to the Permitted
Notes Collateral Liens, Permitted Liens and Liens on North America ABL Priority Collateral securing North America ABL Obligations).
(b) notwithstanding the foregoing, no Grantor shall be required to take any action to perfect any Collateral that can only be
perfected by (i) Control, (ii) foreign filings with respect to Intellectual Property, or (iii) filings with registrars of motor vehicles or similar
governmental authorities with respect to goods covered by a certificate of title, in each case except as and to the extent specified in Section 4
hereof.
6.5 Goods and Receivables .
(a) it shall not deliver any Document evidencing any Equipment and Inventory to any Person other than the issuer of such
Document to claim the Goods evidenced therefor, the Notes Collateral Trustee or the North America ABL Agent, as applicable, in accordance
with the Intercreditor Agreement;
(b) if any Equipment or Inventory is in possession or control of any warehouseman, bailee or other third party (other than a
Consignee under a Consignment for which such Grantor is the Consignor), each Grantor shall notify the third party of the Notes Collateral
Trustee’s security interests and obtaining an acknowledgment from the third party that it is holding the Equipment and Inventory for the benefit
of the Notes Collateral Trustee, and will permit the Notes Collateral Trustee to have access to Equipment or Inventory for purposes of
inspecting such Collateral or, following an Event of Default and subject to the Intercreditor Agreement, to remove same from such premises if
the Notes Collateral Trustee so elects; and with respect to any Goods subject to a Consignment for which such Grantor is the Consignor,
Grantor shall file appropriate financing statements against the Consignee and take such other action as may be necessary to ensure that the
Grantor has a first priority perfected security interest in such Goods.
(c) it shall keep and maintain at its own cost and expense satisfactory and complete records of the Receivables, including, but not
limited to, the originals of all documentation with respect to all Receivables and records of all payments received and all credits granted on the
Receivables, all merchandise returned and all other dealings therewith;
(d) other than in the ordinary course of business (i) it shall not amend, modify, terminate or waive any provision of any Receivable
in any manner which could reasonably be expected to have a material adverse effect on the value of such Receivable; (ii) following and during
the continuation of an Event of Default, such Grantor shall not (w) grant any extension or renewal of the time of payment of any Receivable,
(x) compromise or settle any dispute, claim or legal proceeding with respect to any Receivable for less than the total unpaid balance thereof,
(y) release, wholly or partially, any Person liable for the payment thereof, or (z) allow any credit or discount thereon; and
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(e) the Notes Collateral Trustee shall have the right, subject to the Intercreditor Agreement, at any time after the occurrence of an
Event of Default to notify, or require any Grantor to notify, any Account Debtor of the Notes Collateral Trustee’s security interest in the
Receivables and any Supporting Obligation and, in addition, the Notes Collateral Trustee may, subject to the Intercreditor Agreement: (i) direct
the Account Debtors under any Receivables to make payment of all amounts due or to become due to such Grantor thereunder directly to the
Notes Collateral Trustee; (ii) notify, or require any Grantor to notify, each Person maintaining a lockbox or similar arrangement to which
Account Debtors under any Receivables have been directed to make payment to remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox or other arrangement directly to the Notes Collateral Trustee; and
(iii) enforce, at the expense of such Grantor, collection of any such Receivables and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have done. If the Notes Collateral Trustee notifies any Grantor that it
has elected to collect the Receivables in accordance with the preceding sentence, any payments of Receivables received by such Grantor shall
be forthwith (and in any event within two (2) Business Days) deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Notes Collateral Trustee, if required, in the Collateral Account maintained under the sole dominion and control of the Notes
Collateral Trustee, and until so turned over, all amounts and proceeds (including checks and other instruments) received by such Grantor in
respect of the Receivables, any Supporting Obligation or Collateral Support shall be received in trust for the benefit of the Notes Collateral
Trustee hereunder and shall be segregated from other funds of such Grantor and such Grantor shall not adjust, settle or compromise the amount
or payment of any Receivable, or release wholly or partly any Account Debtor or obligor thereof, or allow any credit or discount thereon.
6.6 Pledged Equity Interests, Investment Related Property .
(a) except as provided in the next sentence, in the event such Grantor receives any dividends, interest or distributions on any
Pledged Equity Interest or other Investment Related Property, upon the merger, consolidation, liquidation or dissolution of any issuer of any
Pledged Equity Interest or Investment Related Property, then (a) such dividends, interest or distributions and securities or other property shall
be included in the definition of Collateral without further action and (b) such Grantor shall immediately take all steps, if any, necessary or
advisable to ensure the validity, perfection, priority of the Notes Collateral Trustee’s Liens granted hereby (and, if applicable, control of the
Notes Collateral Trustee) over such Investment Related Property subject to the Intercreditor Agreement (including, without limitation, delivery
thereof to the Notes Collateral Trustee) and pending any such action such Grantor shall be deemed to hold such dividends, interest,
distributions, securities or other property in trust for the benefit of the Notes Collateral Trustee and shall segregate such dividends,
distributions, Securities or other property from all other property of such Grantor. Notwithstanding the foregoing, so long as no Event of
Default shall have occurred and be continuing, the Notes Collateral Trustee authorizes each Grantor to retain all ordinary cash dividends and
distributions paid in the normal course of the business of the issuer and consistent with the past practice of the issuer and all scheduled
payments of interest;
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(b) Voting .
(i) so long as no Event of Default shall have occurred and be continuing, except as otherwise provided under the covenants
and agreements relating to Investment Related Property in this Agreement or elsewhere herein or in the Indenture, any other Pari
Passu Lien Debt Document or the Intercreditor Agreement, each Grantor shall be entitled to exercise or refrain from exercising any
and all voting and other consensual rights pertaining to the Investment Related Property or any part thereof for any purpose not
inconsistent with the terms of this Agreement, the Indenture, any other Pari Passu Lien Document or the Intercreditor Agreement;
provided , that no Grantor shall exercise or refrain from exercising any such right if such action would have a material adverse
effect on the value of the Investment Related Property or any part thereof; it being understood, however, that neither the voting by
such Grantor of any Pledged Stock for, or such Grantor’s consent to, the election of directors (or similar governing body) at a
regularly scheduled annual or other meeting of stockholders or with respect to incidental matters at any such meeting, nor such
Grantor’s consent to or approval of any action otherwise permitted under this Agreement, the Intercreditor Agreement, the
Indenture and any other Pari Passu Lien Debt Document, shall be deemed inconsistent with the terms of this Agreement, the
Intercreditor Agreement, the Indenture or any other Pari Passu Lien Debt Document within the meaning of this Section 6.6(b)(i) and
no notice of any such voting or consent need be given to the Notes Collateral Trustee; and
(ii) Upon the occurrence and during the continuation of an Event of Default and upon two (2) Business Days prior written
notice from the Notes Collateral Trustee to such Grantor of the Notes Collateral Trustee’s intention to exercise such rights:
(1) all rights of each Grantor to exercise or refrain from exercising the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon become vested in the
Notes Collateral Trustee who shall thereupon have the sole right (but shall not be required) to exercise such voting and other
consensual rights (in each case, subject to the Intercreditor Agreement); and
(2) in order to permit the Notes Collateral Trustee to exercise the voting and other consensual rights which it may be
entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive
hereunder (in each case, subject to the Intercreditor Agreement): (1) each Grantor shall promptly execute and deliver (or
cause to be executed and delivered) to the Notes Collateral Trustee all proxies, dividend payment orders and other
instruments as the Notes Collateral Trustee may from time to time reasonably request and (2) each Grantor acknowledges
that the Notes Collateral Trustee may utilize the power of attorney set forth in Section 8.1.
(c) except as expressly permitted by the Indenture, any other Pari Passu Lien Debt Document and the Intercreditor Agreement, it
shall not vote to enable or take any other action to: (i) amend or terminate any partnership agreement, limited liability company
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agreement, certificate of incorporation, by-laws or other organizational documents in any way that materially changes the rights of such
Grantor with respect to any Investment Related Property or adversely affects the validity, perfection or priority of the Notes Collateral
Trustee’s security interest, (ii) permit any issuer of any Pledged Equity Interest to issue any additional stock, partnership interests, limited
liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or
exchange for any stock or other equity interest of any nature of such issuer, (iii) other than as permitted under the Indenture and any other Pari
Passu Lien Debt Document, permit any issuer of any Pledged Equity Interest to dispose of all or a material portion of their assets, (iv) waive
any default under or breach of any terms of organizational document relating to the issuer of any Pledged Equity Interest or the terms of any
Pledged Debt, or (v) cause any issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of
the UCC) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be
treated as securities for purposes of the UCC; provided , however , notwithstanding the foregoing, if any issuer of any Pledged Partnership
Interests or Pledged LLC Interests takes any such action in violation of the foregoing in this clause (c), such Grantor shall promptly notify the
Notes Collateral Trustee in writing of any such election or action and, in such event, shall take all steps necessary or advisable to ensure the
validity, perfection and priority of the Notes Collateral Trustee’s Liens purported to be granted hereby (or establish “control” of the Notes
Collateral Trustee) over such Investment Related Property (subject to the Intercreditor Agreement).
(d) except as expressly permitted by the Indenture, any other Pari Passu Lien Debt Document and the Intercreditor Agreement, it
shall not permit any issuer of any Pledged Equity Interest to merge or consolidate unless (i) such issuer creates a security interest that is
perfected by a filed financing statement (that is not effective solely under section 9-508 of the UCC) in collateral in which such new debtor has
or acquires rights, (ii) all the outstanding capital stock or other equity interests of the surviving or resulting corporation, limited liability
company, partnership or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding equity interests of any other constituent Grantor; provided that if the surviving or resulting Grantors
upon any such merger or consolidation involving an issuer which is a Foreign Subsidiary, then such Grantor shall only be required to pledge
equity interests in accordance with Section 2.2 and (iii) Grantor promptly complies with the delivery and control requirements of Section 4
hereof.
6.7 Intellectual Property .
(a) it shall not do any act or omit to do any act whereby any of the Material Intellectual Property may lapse, or become abandoned,
canceled, dedicated to the public, forfeited, unenforceable or otherwise impaired, or which would adversely affect the validity, grant, or
enforceability of the security interest granted therein;
(b) it shall not, with respect to any Trademarks constituting Material Intellectual Property, cease the use of any of such Trademarks
or fail to maintain the level of the quality of products sold and services rendered under any of such Trademark at a level at least substantially
consistent with the quality of such products and services as of the date hereof, and such Grantor shall take all steps necessary to ensure that
licensees of such Trademarks use such consistent standards of quality;
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(c) it shall, (i) within sixty (60) days of the acquisition of any exclusive license of any registered Copyright that is material to the
business of such Grantor or otherwise of material value, record such license in the United States Copyright Office, or where appropriate, any
foreign counterpart and (ii) within sixty (60) days of the creation or acquisition of any copyrightable work that is material to the business of
such Grantor or otherwise of material value, apply to register the Copyright in the United States Copyright Office or, where appropriate, any
foreign counterpart;
(d) it shall promptly notify the Notes Collateral Trustee if it knows or has reason to know that any item of the registered Intellectual
Property or Material Intellectual Property may become (i) abandoned or dedicated to the public or placed in the public domain, (ii) invalid or
unenforceable, (iii) subject to any adverse determination or development regarding such Grantor’s ownership, registration or use or the validity
or enforceability of such item of Intellectual Property (including the institution of, or any adverse development with respect to, any action or
proceeding in the United States Patent and Trademark Office, the United States Copyright Office, any state registry, any foreign counterpart of
the foregoing, or any court) or (iv) the subject of any reversion or termination rights;
(e) it shall take all reasonable steps, including in any proceeding before the United States Patent and Trademark Office, the United
States Copyright Office, any state registry or any foreign counterpart of the foregoing, to pursue any application and maintain any registration
or issuance of each Trademark, Patent, and Copyright owned by or exclusively licensed to any Grantor and constituting Material Intellectual
Property, including, but not limited to, those items on Schedule 5.2(II) (as such schedule may be amended or supplemented from time to time);
(f) it shall use best efforts so as not to permit the inclusion in any contract to which it hereafter becomes a party of any provision
that could or may in any way materially impair or prevent the creation of a security interest in, or the assignment of, such Grantor’s rights and
interests in any property included within the definitions of any Intellectual Property acquired under such contracts;
(g) in the event that any Material Intellectual Property owned by or exclusively licensed to any Grantor is infringed,
misappropriated, diluted or otherwise violated by a third party, such Grantor shall promptly take all reasonable actions (in the case of
Intellectual Property exclusively licensed to a Grantor, solely to the extent that the terms of such license permit such actions) to stop such
infringement, misappropriation, dilution or other violation and protect its rights in such Intellectual Property including, but not limited to, the
initiation of a suit for injunctive relief and to recover damages;
(h) it shall take all steps reasonably necessary to protect the secrecy of all Trade Secrets, including, without limitation, entering into
confidentiality agreements with employees and consultants and labeling and restricting access to secret information and documents;
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(i) it shall use proper statutory notice in connection with its use of any of the Intellectual Property; and
(j) it shall continue to collect, at its own expense, all amounts due or to become due to such Grantor in respect of the Material
Intellectual Property or any portion thereof. In connection with such collections, such Grantor may take (and, at the Notes Collateral Trustee’s
reasonable direction, shall take) such action as such Grantor may deem reasonably necessary or advisable to enforce collection of such
amounts. Notwithstanding the foregoing, the Notes Collateral Trustee shall have the right at any time, to notify, or require any Grantor to
notify, any obligors with respect to any such amounts of the existence of the security interest created hereby.
SECTION 7.
FURTHER ASSURANCES; ADDITIONAL GRANTORS.
7.1 Further Assurances .
(a) Subject to the Intercreditor Agreement and the Collateral Trust Agreement, each Grantor agrees that from time to time, at the
expense of such Grantor, that it shall promptly execute and deliver all further instruments and documents, and take all further action, that may
be necessary or desirable, or that the Notes Collateral Trustee may reasonably request, in order to create and/or maintain the validity, perfection
or priority of and protect any security interest granted or purported to be granted hereby or to enable the Notes Collateral Trustee to exercise
and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, each Grantor
(subject to the Intercreditor Agreement and the Collateral Trust Agreement):
(i) authorizes the Notes Collateral Trustee to file such financing or continuation statements, or amendments thereto, record
security interests in Intellectual Property and execute and deliver such other agreements, instruments, endorsements, powers of
attorney or notices, as may be necessary or desirable, or as the Notes Collateral Trustee may reasonably request, in order to effect,
reflect, perfect and preserve the security interests granted or purported to be granted hereby;
(ii) authorizes the Notes Collateral Trustee to take all actions necessary to ensure the recordation of appropriate evidence of
the liens and security interest granted hereunder in any Intellectual Property with any intellectual property registry in which said
Intellectual Property is registered or issued or in which an application for registration or issuance is pending, including, without
limitation, the United States Patent and Trademark Office, the United States Copyright Office, the various Secretaries of State, and
the foreign counterparts on any of the foregoing;
(iii) subject to the Intercreditor Agreement and the Collateral Trust Agreement, at any reasonable time, upon request by the
Notes Collateral Trustee, shall assemble the Collateral and allow inspection of the Collateral by the Notes Collateral Trustee, or
persons designated by the Notes Collateral Trustee;
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(iv) at the Notes Collateral Trustee’s request, shall appear in and defend any action or proceeding that may affect such
Grantor’s title to or the Notes Collateral Trustee’s security interest in all or any part of the Collateral; and
(v) shall furnish the Notes Collateral Trustee with such information regarding the Collateral, including, without limitation, the
location thereof, as the Notes Collateral Trustee may reasonably request from time to time.
(b) Each Grantor hereby authorizes the Notes Collateral Trustee to file a Record or Records, including, without limitation, financing
or continuation statements, Intellectual Property Security Agreements and amendments and supplements to any of the foregoing, in any
jurisdictions and with any filing offices as the Notes Collateral Trustee may determine, in its sole discretion, are necessary or advisable to
perfect or otherwise protect the security interest granted to the Notes Collateral Trustee herein. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any
other manner as the Notes Collateral Trustee may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of
the security interest in the Collateral granted to the Notes Collateral Trustee herein, including, without limitation, describing such property as
“all assets, whether now owned or hereafter acquired, developed or created” or words of similar effect. Each Grantor shall furnish to the Notes
Collateral Trustee from time to time statements and schedules further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Notes Collateral Trustee may reasonably request, all in reasonable detail.
(c) Each Grantor hereby authorizes the Notes Collateral Trustee to modify this Agreement after obtaining such Grantor’s approval
of or signature to such modification by amending Schedule 5.2 (as such schedule may be amended or supplemented from time to time) to
include reference to any right, title or interest in any existing Intellectual Property or any Intellectual Property acquired or developed by any
Grantor after the execution hereof or to delete any reference to any right, title or interest in any Intellectual Property in which any Grantor no
longer has or claims any right, title or interest.
7.2 Additional Grantors . From time to time subsequent to the date hereof, additional Persons may become parties hereto as additional
Grantors (each, an “ Additional Grantor ”), by executing a Pledge Supplement, with notice to, but without further action by or consent
required from, the Notes Collateral Trustee. Upon delivery of any such Pledge Supplement to the Notes Collateral Trustee, notice of which is
hereby waived by Grantors, each Additional Grantor shall be a Grantor and shall be as fully a party hereto as if Additional Grantor were an
original signatory hereto. Each Grantor expressly agrees that its obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Grantor hereunder, nor by any election of Notes Collateral Trustee not to cause any Subsidiary of the Issuer,
Holdings or any Subsidiary Guarantor to become an Additional Grantor hereunder. This Agreement shall be fully effective as to any Grantor
that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Grantor hereunder.
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SECTION 8.
NOTES COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT.
8.1 Power of Attorney . Each Grantor hereby irrevocably appoints the Notes Collateral Trustee (such appointment being coupled with an
interest) as such Grantor’s attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor, the Notes
Collateral Trustee or otherwise, from time to time in the Notes Collateral Trustee’s discretion to take any action and to execute any instrument
that the Notes Collateral Trustee may deem reasonably necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, the following (but subject, in each case, to the Intercreditor Agreement and the Collateral Trust Agreement):
(a) upon the occurrence and during the continuance of any Event of Default, to obtain and adjust insurance required to be
maintained by such Grantor or paid to the Notes Collateral Trustee pursuant to the Indenture or any other Pari Passu Lien Debt Document;
(b) upon the occurrence and during the continuance of any Event of Default, to ask for, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of any Event of Default, to file any claims or take any action or institute any
proceedings that the Notes Collateral Trustee may deem necessary or desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Notes Collateral Trustee with respect to any of the Collateral;
(e) to prepare and file any UCC financing statements against such Grantor as debtor;
(f) to prepare, sign, and file for recordation in any intellectual property registry, appropriate evidence of the lien and security
interest granted herein in any Intellectual Property in the name of such Grantor as debtor;
(g) to take or cause to be taken all actions necessary to perform or comply or cause performance or compliance with the terms of
this Agreement, including, without limitation, access to pay or discharge taxes or Liens (other than Liens securing North America ABL
Obligations, Permitted Notes Collateral Liens and Permitted Liens) levied or placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be determined by the Notes Collateral Trustee in its sole discretion, any
such payments made by the Notes Collateral Trustee to become obligations of such Grantor to the Notes Collateral Trustee, due and payable
immediately without demand; and
(h) (i) upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, lease, license, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Notes Collateral
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Trustee were the absolute owner thereof for all purposes, and (ii) to do, at the Notes Collateral Trustee’s option and such Grantor’s expense, at
any time or from time to time, whether or not an Event of Default has occurred and is continuing, generally all acts and things that the Notes
Collateral Trustee deems reasonably necessary to protect, preserve or realize upon the Collateral and the Notes Collateral Trustee’s security
interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
8.2 No Duty on the Part of Notes Collateral Trustee or Secured Parties . The powers conferred on the Notes Collateral Trustee
hereunder are solely to protect the interests of the Secured Parties in the Collateral and shall not impose any duty upon the Notes Collateral
Trustee or any other Secured Party to exercise any such powers. The Notes Collateral Trustee and the other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.
8.3 Appointment Pursuant to Indenture and Collateral Trust Agreement . The Notes Collateral Trustee has been appointed as notes
collateral trustee pursuant to the Indenture and the Collateral Trust Agreement. The rights, duties, privileges, immunities and indemnities of the
Notes Collateral Trustee hereunder are subject to the provisions of the Indenture and the Collateral Trust Agreement.
SECTION 9.
REMEDIES.
9.1 Generally .
(a) If any Event of Default shall have occurred and be continuing (subject, in each case, to the Intercreditor Agreement and the
Collateral Trust Agreement), the Notes Collateral Trustee, at the expense of Grantors, may exercise in respect of the Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it at law or in equity, all the rights and remedies of the Notes
Collateral Trustee on default under the UCC (whether or not the UCC applies to the affected Collateral) to collect, enforce or satisfy any
Secured Obligations then owing, whether by acceleration or otherwise, and also may pursue any of the following separately, successively or
simultaneously:
(i) require any Grantor to, and each Grantor hereby agrees that it shall at its expense and promptly upon request of the Notes
Collateral Trustee forthwith, assemble all or part of the Collateral as directed by the Notes Collateral Trustee and make it available
to the Notes Collateral Trustee at a place to be designated by the Notes Collateral Trustee that is reasonably convenient to both
parties;
(ii) enter onto the property where any Collateral is located and take possession thereof with or without judicial process;
(iii) prior to the disposition of the Collateral, store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent the Notes Collateral Trustee deems appropriate; and
(iv) without notice except as specified below or under the UCC, sell, assign, lease, license (on an exclusive or nonexclusive
basis) or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Notes
Collateral Trustee’s offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices
and upon such other terms as the Notes Collateral Trustee may deem commercially reasonable.
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(b) The Notes Collateral Trustee or any other Secured Party may be the purchaser of any or all of the Collateral at any public or
private (to the extent the portion of the Collateral being privately sold is of a kind that is customarily sold on a recognized market or the subject
of widely distributed standard price quotations) sale in accordance with the UCC and the Notes Collateral Trustee, as notes collateral trustee for
and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Collateral sold at any such sale made in accordance with the UCC, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any Collateral payable by the Notes Collateral Trustee at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days’ notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Notes Collateral Trustee shall not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Notes Collateral Trustee may adjourn any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor
agrees that it would not be commercially unreasonable for the Notes Collateral Trustee to dispose of the Collateral or any portion thereof by
using Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing
so, or that match buyers and sellers of assets. Each Grantor hereby waives any claims against the Notes Collateral Trustee arising by reason of
the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained
at a public sale, even if the Notes Collateral Trustee accepts the first offer received and does not offer such Collateral to more than one offeree.
Subject to the Intercreditor Agreement and the Collateral Trust Agreement, if the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantors shall be liable for the deficiency and the fees of any attorneys or other agents employed
by the Notes Collateral Trustee to collect such deficiency. Each Grantor further agrees that a breach of any of the covenants contained in this
Section will cause irreparable injury to the Notes Collateral Trustee, that the Notes Collateral Trustee has no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants
except for a defense that no default has occurred giving rise to the Secured Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section shall in any way limit the rights of the Notes Collateral Trustee hereunder.
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(c) The Notes Collateral Trustee may sell the Collateral without giving any warranties as to the Collateral. The Notes Collateral
Trustee may specifically disclaim or modify any warranties of title or the like. This procedure will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.
(d) The Notes Collateral Trustee shall have no obligation to marshal any of the Collateral.
9.2 Application of Proceeds . All proceeds received by the Notes Collateral Trustee in respect of any sale of, any collection from, or
other realization upon all or any part of the Collateral shall be applied by the Notes Collateral Trustee as provided in the Collateral Trust
Agreement.
9.3 Sales on Credit . If the Notes Collateral Trustee sells any of the Collateral upon credit, Grantor will be credited only with payments
actually made by purchaser and received by the Notes Collateral Trustee and applied to indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, the Notes Collateral Trustee may resell the Collateral and Grantor shall be credited with proceeds of
the sale.
9.4 Investment Related Property . Each Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act and
applicable state securities laws, the Notes Collateral Trustee may be compelled, with respect to any sale of all or any part of the Investment
Related Property conducted without prior registration or qualification of such Investment Related Property under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges that any such private sale may be
at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made
pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances, each Grantor agrees that any such
private sale shall be deemed to have been made in a commercially reasonable manner and that the Notes Collateral Trustee shall have no
obligation to engage in public sales and no obligation to delay the sale of any Investment Related Property for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities
laws, even if such issuer would, or should, agree to so register it. If the Notes Collateral Trustee determines to exercise its right to sell any or all
of the Investment Related Property, upon written request, each Grantor shall and shall cause each issuer of any Pledged Stock to be sold
hereunder, each partnership and each limited liability company from time to time to furnish to the Notes Collateral Trustee all such information
as the Notes Collateral Trustee may request in order to determine the number and nature of interest, shares or other instruments included in the
Investment Related Property which may be sold by the Notes Collateral Trustee in exempt transactions under the Securities Act and the rules
and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.
9.5 Grant of Intellectual Property License . For the purpose of enabling the Notes Collateral Trustee, during the continuance of an
Event of Default, to exercise rights and remedies under Section 9 hereof at such time as the Notes Collateral Trustee shall be lawfully entitled
to
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exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Notes Collateral Trustee, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor), subject, in
the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of such
Trademarks, to use, assign, license or sublicense any of the Intellectual Property now owned or hereafter acquired, developed or created by
such Grantor, wherever the same may be located. Such license shall include access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or printout thereof.
9.6 Intellectual Property .
(a) Anything contained herein to the contrary notwithstanding, in addition to the other rights and remedies provided herein, upon
the occurrence and during the continuation of an Event of Default:
(i) the Notes Collateral Trustee shall have the right (but not the obligation) to bring suit or otherwise commence any action or
proceeding in the name of any Grantor, the Notes Collateral Trustee or otherwise, in the Notes Collateral Trustee’s sole discretion,
to enforce any Intellectual Property rights of such Grantor, in which event such Grantor shall, at the request of the Notes Collateral
Trustee, do any and all lawful acts and execute any and all documents required by the Notes Collateral Trustee in aid of such
enforcement, and such Grantor shall promptly, upon demand, reimburse and indemnify the Notes Collateral Trustee as provided in
Section 12 hereof in connection with the exercise of its rights under this Section 9.6, and, to the extent that the Notes Collateral
Trustee shall elect not to bring suit to enforce any Intellectual Property rights as provided in this Section 9.6, each Grantor agrees to
use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement, misappropriation,
dilution or other violation of any of such Grantor’s rights in the Intellectual Property by others and for that purpose agrees to
diligently maintain any action, suit or proceeding against any Person so infringing, misappropriating, diluting or otherwise violating
as shall be necessary to prevent such infringement, misappropriation, dilution or other violation;
(ii) upon written demand from the Notes Collateral Trustee, each Grantor shall grant, assign, convey or otherwise transfer to
the Notes Collateral Trustee or such Notes Collateral Trustee’s designee all of such Grantor’s right, title and interest in and to any
Intellectual Property and shall execute and deliver to the Notes Collateral Trustee such documents as are necessary or appropriate to
carry out the intent and purposes of this Agreement;
(iii) each Grantor agrees that such an assignment and/or recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that the Notes Collateral Trustee (or any other Secured Party) receives cash proceeds in respect of the
sale of, or other realization upon, any such Intellectual Property;
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(iv) within ten (10) Business Days after written notice from the Notes Collateral Trustee, each Grantor shall make available to
the Notes Collateral Trustee, to the extent within such Grantor’s power and authority, such personnel in such Grantor’s employ on
the date of such Event of Default as the Notes Collateral Trustee may reasonably designate, by name, title or job responsibility, to
permit such Grantor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by
such Grantor under or in connection with any Trademarks or Trademark Licenses, such persons to be available to perform their
prior functions on the Notes Collateral Trustee’s behalf and to be compensated by the Notes Collateral Trustee at such Grantor’s
expense on a per diem, pro-rata basis consistent with the salary and benefit structure applicable to each as of the date of such Event
of Default; and
(v) the Notes Collateral Trustee shall have the right to notify, or require each Grantor to notify, any obligors with respect to
amounts due or to become due to such Grantor in respect of any Intellectual Property of such Grantor (including any licensees of
such Intellectual Property), of the existence of the security interest created herein, to direct such obligors to make payment of all
such amounts directly to the Notes Collateral Trustee, and, upon such notification and at the expense of such Grantor, to enforce
collection of any such amounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the
same extent as such Grantor might have done;
(1) all amounts and proceeds (including checks and other instruments) received by Grantor in respect of amounts due
to such Grantor in respect of the Collateral or any portion thereof shall be received in trust for the benefit of the Notes
Collateral Trustee hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to the Notes Collateral Trustee in the same form as so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by Section 9.7 hereof; and
(2) Grantor shall not adjust, settle or compromise the amount or payment of any such amount or release wholly or
partly any obligor with respect thereto or allow any credit or discount thereon.
(b) If (i) an Event of Default shall have occurred and, by reason of cure, waiver, modification, amendment or otherwise, no longer
be continuing, (ii) no other Event of Default shall have occurred and be continuing, (iii) an assignment or other transfer to the Notes Collateral
Trustee of any rights, title and interests in and to any Intellectual Property of such Grantor shall have been previously made and shall have
become absolute and effective, and (iv) the Secured Obligations shall not have become immediately due and payable, upon the written request
of any Grantor, the Notes Collateral Trustee shall promptly execute and deliver to such Grantor, at such Grantor’s sole cost and expense, such
assignments or other instruments of transfer as may be necessary to reassign to such Grantor any such rights, title and interests as may have
been assigned to the Notes Collateral Trustee under Section 9.6(a), subject to any disposition thereof that may have been made by the Notes
Collateral Trustee pursuant to the terms thereof; provided , after giving effect to such reassignment, the Notes Collateral Trustee’s
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security interest granted pursuant hereto, as well as all other rights and remedies of the Notes Collateral Trustee granted hereunder, shall
continue to be in full force and effect; and provided further , the rights, title and interests so reassigned shall be free and clear of any other
Liens granted by or on behalf of the Notes Collateral Trustee and the Secured Parties.
9.7 Cash Proceeds; Deposit Accounts .
(a) The Issuer hereby designates the Issuer’s account number 3801318633 maintained at Wintrust Bank as the “Notes Priority
Collateral Account” (such account and any other account that is subject to a Deposit Account Control Agreement or a Securities Account
Control Agreement and that is designated from time to time by the Issuer as such account, the “ Notes Priority Collateral Account ”). All
proceeds of any Notes Priority Collateral received by any Grantor consisting of cash, checks and other near-cash items (collectively, “ Cash
Proceeds ”) shall be held by such Grantor in trust for the Notes Collateral Trustee, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be deposited in the Notes Priority Collateral Account.
(b) If any Event of Default shall have occurred and be continuing, in addition to the rights of the Notes Collateral Trustee specified
in Section 6.5 with respect to payments of Receivables and subject to the Intercreditor Agreement and the Collateral Trust Agreement, all
proceeds of any Notes Priority Collateral received by any Grantor consisting of Cash Proceeds shall be held by such Grantor in trust for the
Notes Collateral Trustee, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the
Notes Collateral Trustee in the exact form received by such Grantor (duly indorsed by such Grantor to the Notes Collateral Trustee, if required)
and held by the Notes Collateral Trustee in the Collateral Account. Subject to the Intercreditor Agreement and the Collateral Trust Agreement,
any Cash Proceeds received by the Notes Collateral Trustee (whether from a Grantor or otherwise) may, in the sole discretion of the Notes
Collateral Trustee, (A) be held by the Notes Collateral Trustee for the ratable benefit of the Secured Parties, as collateral security for the
Secured Obligations (whether matured or unmatured) and/or (B) then or at any time thereafter may be applied by the Notes Collateral Trustee
against the Secured Obligations then due and owing.
(c) If any Event of Default shall have occurred and be continuing, the Notes Collateral Trustee may apply the balance from any
Deposit Account or instruct the bank at which any Deposit Account is maintained to pay the balance of any Deposit Account to or for the
benefit of the Notes Collateral Trustee.
SECTION 10.
NOTES COLLATERAL TRUSTEE.
The Notes Collateral Trustee has been appointed to act as Notes Collateral Trustee hereunder by each Pari Passu Lien Debt
Representative and, by their acceptance of the benefits hereof, the other Secured Parties. The Notes Collateral Trustee shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from
taking any action (including, without limitation, the release or substitution of Collateral), solely in accordance with this Agreement, the
Intercreditor Agreement and the Collateral Trust Agreement. In furtherance of the foregoing provisions of
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this Section, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of
the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely
by the Notes Collateral Trustee for the benefit of Secured Parties in accordance with the terms of this Section. The provisions of the Collateral
Trust Agreement relating to the Notes Collateral Trustee including, without limitation, the provisions relating to resignation or removal of the
Notes Collateral Trustee and the powers and duties and immunities of the Notes Collateral Trustee are incorporated herein by this reference and
shall survive any termination of the Collateral Trust Agreement. The Notes Collateral Trustee shall be entitled to all rights, protections and
indemnities provided to it under the Collateral Trust Agreement with respect to its actions hereunder.
SECTION 11.
CONTINUING SECURITY INTEREST; TRANSFER OF NOTES; RELEASE.
This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until the Discharge of
Pari Passu Lien Obligations, be binding upon each Grantor, its successors and assigns, and inure, together with the rights and remedies of the
Notes Collateral Trustee hereunder, to the benefit of the Notes Collateral Trustee and its successors, transferees and assigns. Without limiting
the generality of the foregoing, but subject to the terms of the Collateral Trust Agreement, any Holder may assign or otherwise transfer any
Notes held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to
Holders herein or otherwise. Upon the consummation of any transaction permitted by the Indenture and any other Pari Passu Lien Debt
Document as a result of which any Grantor ceases to be a Subsidiary of the Issuer and is released from its Guarantee of the Notes, such Grantor
shall automatically be released from its obligations hereunder and the Liens granted herein in the Collateral of such Grantor shall be deemed to
be automatically released, in each case, with no further action on the part of any Person. All other releases of Collateral shall be made in
accordance with the terms of the Intercreditor Agreement and the Collateral Trust Agreement.
SECTION 12.
STANDARD OF CARE; NOTES COLLATERAL TRUSTEE MAY PERFORM.
The powers conferred on the Notes Collateral Trustee hereunder are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Notes Collateral Trustee shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Notes Collateral Trustee shall
be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Notes Collateral Trustee accords its own property. Neither the Notes Collateral Trustee nor any
of its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for
any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or
otherwise. If any Grantor fails to perform any agreement contained herein, the
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Notes Collateral Trustee may itself perform, or cause performance of, such agreement, and the expenses of the Notes Collateral Trustee
incurred in connection therewith shall be payable by each Grantor under the Collateral Trust Agreement.
SECTION 13.
UNLIMITED LIABILITY COMPANIES.
Notwithstanding any other provision in this Agreement or any other document or agreement among all or some of the parties hereto, to
the extent that any Unlimited Liability Securities constitute Collateral, each Grantor thereof is the sole registered and beneficial holder of any
such Unlimited Liability Securities and will remain so until such time as such Unlimited Liability Securities are effectively transferred into the
name of the Notes Collateral Trustee, any other Secured Party or any other person on the books and records of the issuer of such pledged
Unlimited Liability Securities. Accordingly, each such Grantor shall be entitled to receive and retain for its own account any dividends,
property or other distributions, if any, in respect of such Unlimited Liability Securities (except insofar as the Grantor has granted a security
interest in such dividends, property or other distributions, and any shares which are Unlimited Liability Securities shall be delivered to the
Notes Collateral Trustee to hold as Collateral hereunder) and shall have the right to vote such Unlimited Liability Securities and to control the
direction, management and policies of the issuer of such Unlimited Liability Securities to the same extent as the Grantor would if such
Unlimited Liability Securities were not pledged to the Notes Collateral Trustee pursuant hereto. Nothing in this Agreement or any other
document or agreement among all or some of the parties hereto is intended to, and nothing in this Agreement, or any other document or
agreement among all or some of the parties hereto shall constitute Notes Collateral Trustee nor any other Secured Party as a member,
shareholder or other equity holder for the purposes of the Companies Act (Nova Scotia) or other applicable legislation governing the formation
of an Unlimited Company (“ ULC Legislation ”) or provide to them the right to obtain any other indicia of ownership of any Unlimited
Company until such time as notice is given to the Grantor and further steps are taken thereunder so as to register the Notes Collateral Trustee,
or any other person as holder of Collateral which are Unlimited Liability Securities. No provision in this Agreement (except this Section 13) or
actions taken by the Notes Collateral Trustee pursuant to this Agreement which might provide or be deemed to provide otherwise, in whole or
in part, shall, without the express written consent of the Notes Collateral Trustee, apply in respect of Unlimited Liability Securities. To the
extent any provision hereof or of any other document or agreement would have the effect of constituting the Notes Collateral Trustee, any other
Secured Party, or any other person as a shareholder or member of an issuer of Unlimited Liability Securities for the purposes of the ULC
Legislation prior to such time, such provision shall be severed herefrom or therefrom and ineffective with respect to the Collateral which are
Unlimited Liability Securities without otherwise invalidating or rendering unenforceable this Agreement or such other agreement or
invalidating or rendering unenforceable such provision insofar as it relates to Collateral which is not Unlimited Liability Securities. For the
avoidance of doubt, and except as otherwise provided in the last sentence of this Section 13, no provision of this Agreement or actions taken by
the Notes Collateral Trustee pursuant to this Agreement shall apply, or be deemed to apply, so as to cause the Notes Collateral Trustee or any
other Secured Party to be, and the Notes Collateral Trustee and each other Secured Party shall not be or be deemed to be or entitled to, and no
Grantor shall cause or permit the Notes Collateral Trustee or any other Secured Party to:
(a) be registered as a shareholder, member or other equity holder, or apply to be registered as a shareholder, member or other equity
holder, of any Unlimited Company;
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(b) have a notation, or request or assent to a notation, being entered in its favor in the share or equity register in respect of Unlimited
Liability Securities;
(c) be held out, or hold itself out, as a shareholder, member or other equity holder of any Unlimited Company;
(d) receive, directly or indirectly, any dividends, property or other distributions from such Unlimited Company by reason of the
Notes Collateral Trustee or any other Secured Party holding a security interest in such Unlimited Company; or
(e) act or purport to act as a shareholder, member or other equity holder of any Unlimited Company, or obtain, exercise or attempt
to exercise any rights of a shareholder, member or other equity holder, including the right to attend a meeting of, or to vote any Unlimited
Liability Securities or to be entitled to receive or receive any dividend, property or other distribution in respect of Unlimited Liability
Securities.
The foregoing limitation shall not restrict the Notes Collateral Trustee from exercising the rights which it is entitled to exercise
hereunder in respect of any Unlimited Liability Securities constituting Collateral at any time that the Notes Collateral Trustee shall be entitled
to realize on all or any portion of the Collateral and upon notice being given of the intention to realize upon such Collateral and in the course of
exercising upon such Collateral.
SECTION 14.
MISCELLANEOUS.
Any notice required or permitted to be given under this Agreement shall be given in accordance with the Collateral Trust Agreement. No
failure or delay on the part of the Notes Collateral Trustee in the exercise of any power, right or privilege hereunder or under the Collateral
Trust Agreement shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement and the Collateral Trust Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available. In case any provision in or obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to,
or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists. This Agreement shall be binding upon and inure to the benefit of the Notes Collateral Trustee and the
Grantors and their respective successors and assigns. No Grantor shall, without the prior written consent of the Notes Collateral Trustee given
in accordance with the Collateral Trust Agreement, assign any right, duty or obligation hereunder. This Agreement and the Collateral Trust
Agreement embody the entire agreement and
39
understanding between the Grantors and the Notes Collateral Trustee and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the Collateral Trust Agreement may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. This
Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are
physically attached to the same document.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT
LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER
HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT
WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER
THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND THE
EFFECT OF PERFECTION OF THE SECURITY INTEREST).
THE PROVISIONS OF THE COLLATERAL TRUST AGREEMENT UNDER THE HEADINGS “CONSENT TO
JURISDICTION” AND “WAIVER OF JURY TRIAL” ARE INCORPORATED HEREIN BY THIS REFERENCE AND SUCH
INCORPORATION SHALL SURVIVE ANY TERMINATION OF THE COLLATERAL TRUST AGREEMENT.
40
IN WITNESS WHEREOF, each Grantor and the Notes Collateral Trustee have caused this Agreement to be duly executed and delivered
by their respective officers thereunto duly authorized as of the date first written above.
REAL ALLOY INTERMEDIATE HOLDING, LLC
, as Grantor
By:
Name:
Title:
REAL ALLOY HOLDING, INC. , as Grantor
By:
Name:
Title:
ALERIS RECYCLING, INC. , as Grantor
By:
Name:
Title:
Effective upon the change of name from “Aleris
Recycling, Inc.” to “Real Alloy Recycling, Inc.”:
REAL ALLOY RECYCLING, INC. , as Grantor
By:
Name:
Title:
[Signature Page to Pledge and Security Agreement]
ALERIS RECYCLING BENS RUN , as Grantor
By:
Name:
Title:
Effective upon the change of name from “Aleris
Recycling Bens Runs, LLC” to “Real Alloy Bens
Run, LLC”:
REAL ALLOY BENS RUN, LLC , as Grantor
By:
Name:
Title:
ALERIS SPECIALTY PRODUCTS, INC. , as
Grantor
By:
Name:
Title:
Effective upon the change of name from “Aleris
Specialty Products, Inc.” to “Real Alloy Specialty
Products, Inc.”:
REAL ALLOY SPECIALTY PRODUCTS, INC. , as
Grantor
By:
Name:
Title:
[Signature Page to Pledge and Security Agreement]
ALERIS SPECIFICATION ALLOYS, INC. , as
Grantor
By:
Name:
Title:
Effective upon the change of name from “Aleris
Specification Alloys, Inc.” to “Real Alloy
Specification, Inc.”:
REAL ALLOY SPECIFICATION, INC. , as Grantor
By:
Name:
Title:
ETS SCHAEFER, LLC , as Grantor
By:
Name:
Title:
RA MEXICO HOLDING, LLC , as Grantor
By:
Name:
Title:
[Signature Page to Pledge and Security Agreement]
WILMINGTON TRUST, NATIONAL
ASSOCIATION , as Notes Collateral Trustee
By:
Authorized Signatory
[Signature Page to Pledge and Security Agreement]
Exhibit 10.2
Execution Version
REVOLVING CREDIT AGREEMENT
Dated as of February 27, 2015
by and among
ALERIS RECYCLING, INC. TO BE KNOWN AS
REAL ALLOY RECYCLING, INC.,
(as Borrower Representative),
THE OTHER BORROWERS PARTY HERETO FROM TIME TO TIME,
THE OTHER PERSONS PARTY HERETO THAT ARE
DESIGNATED AS CREDIT PARTIES,
GENERAL ELECTRIC CAPITAL CORPORATION,
for itself, as a Lender, an L/C Issuer and Swingline Lender and as Agent for all
Lenders,
and
ANY OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders
****************************************
GE CAPITAL MARKETS, INC.,
as Sole Lead Arranger and Bookrunner
TABLE OF CONTENTS
ARTICLE I. THE CREDITS
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
2
Amounts and Terms of Commitments
Evidence of Loans; Notes
Interest
Loan Accounts
Procedure for Revolving Credit Borrowing
Conversion and Continuation Elections
Voluntary Prepayments
Mandatory Prepayments of Loans and Commitment Reductions
Fees
Payments by the Borrowers
Payments by the Lenders to Agent; Settlement
Borrower Representative
Eligible Accounts
Eligible Inventory
ARTICLE II. CONDITIONS PRECEDENT
2.1
2.2
2
9
10
11
12
13
14
15
17
19
21
24
25
28
30
Conditions of Initial Loans
Conditions to All Borrowings
30
32
ARTICLE III. REPRESENTATIONS AND WARRANTIES
33
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
Corporate Existence and Power
Corporate Authorization; No Contravention
Governmental Authorization
Binding Effect
Litigation
No Default
Pension Plan; ERISA Compliance
Use of Proceeds; Margin Regulations
Ownership of Property; Liens
Taxes
Financial Condition
Environmental Matters
Regulated Entities
Solvency
Labor Relations
Intellectual Property
Brokers’ Fees; Transaction Fees
Insurance
Ventures, Subsidiaries and Affiliates; Outstanding Stock
Jurisdiction of Organization; Chief Executive Office
33
34
34
34
35
35
35
36
36
37
37
38
39
39
39
39
40
40
40
41
i
3.21
3.22
3.23
3.24
3.25
3.26
3.27
3.28
3.29
3.30
3.31
3.32
3.33
3.34
Locations of Inventory, Equipment and Books and Records
Deposit Accounts and Other Accounts
Government Contracts
Customer and Trade Relations
Bonding
Purchase Agreement
Status of Holding Companies
Other Financing Documents
Full Disclosure
Foreign Assets Control Regulations and Anti-Money Laundering
Patriot Act; Counter-Terrorism Regulations
[Intentionally Omitted.]
Physical Condition of Mortgaged Properties
Access
ARTICLE IV. AFFIRMATIVE COVENANTS
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
44
Financial Statements
Certificates; Other Information
Notices
Preservation of Corporate Existence, Etc.
Maintenance of Property
Insurance
Payment of Obligations
Compliance with Laws; Pension Plans and Benefit Plans
Inspection of Property and Books and Records; Audits; Appraisals
Use of Proceeds
Cash Management Systems
Landlord Agreements
Further Assurances
Environmental Matters
Post-Closing Obligations
ARTICLE V. NEGATIVE COVENANTS
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
41
41
41
41
42
42
42
42
43
43
43
44
44
44
44
45
48
50
51
51
52
53
53
54
55
55
55
57
57
58
Limitation on Liens
Disposition of Assets
Consolidations, Mergers and Amalgamations
Acquisitions; Loans and Investments
Limitation on Indebtedness
Employee Loans and Transactions with Affiliates
Management Fees and Compensation
Margin Stock; Use of Proceeds
Contingent Obligations
Compliance with ERISA, Pension and Benefits Plans
Restricted Payments
Change in Business
58
61
62
64
65
67
67
68
68
69
70
71
ii
5.13
5.14
5.15
5.16
5.17
5.18
5.19
5.20
Change in Structure
Changes in Accounting, Name or Jurisdiction of Organization
Amendments to Related Agreements
No Negative Pledges
OFAC; Patriot Act
Sale-Leasebacks
Hazardous Materials
Prepayments of Other Indebtedness
ARTICLE VI. FINANCIAL COVENANTS
6.1
74
Fixed Charge Coverage Ratio
74
ARTICLE VII. EVENTS OF DEFAULT
7.1
7.2
7.3
7.4
75
Events of Default
Remedies
Rights Not Exclusive
Cash Collateral for Letters of Credit
75
78
78
78
ARTICLE VIII. THE AGENT
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12
8.13
8.14
8.15
79
Appointment and Duties
Binding Effect
Use of Discretion
Delegation of Rights and Duties
Reliance and Liability
Agent Individually
Lender Credit Decision
Expenses; Indemnities; Withholding
Resignation of Agent or L/C Issuer
Release of Collateral or Guarantors
Additional Secured Parties
Sole Lead Arranger and Bookrunner
Information Regarding Bank Products
Intercreditor Agreement
Parallel Debt ( Covenant to pay the Agent )
79
82
82
83
83
85
85
86
87
88
89
89
90
90
90
ARTICLE IX. MISCELLANEOUS
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
71
72
72
72
73
73
74
74
91
Amendments and Waivers
Notices
Electronic Transmissions
No Waiver; Cumulative Remedies
Costs and Expenses
Indemnity
Marshaling; Payments Set Aside
Successors and Assigns
91
94
95
96
96
97
98
99
iii
9.9
9.10
9.11
9.12
9.13
9.14
9.15
9.16
9.17
9.18
9.19
9.20
9.21
9.22
9.23
9.24
9.25
9.26
9.27
9.28
9.29
Binding Effect; Assignments and Participations
Non-Public Information; Confidentiality
Set-off; Sharing of Payments
Counterparts; Facsimile Signature
Severability
Captions
Independence of Provisions
Interpretation
No Third Parties Benefited
Governing Law and Jurisdiction
Waiver of Jury Trial
Entire Agreement; Release; Survival
Patriot Act; Anti-Money Laundering Legislation
Replacement of Lender
Joint and Several
No Liability of the Canadian Credit Parties for U.S. Obligations
Currency Matters
Judgment Currency
Creditor-Debtor Relationship
Actions in Concert
Keepwell
ARTICLE X. TAXES, YIELD PROTECTION AND ILLEGALITY
10.1
10.2
10.3
10.4
10.5
10.6
10.7
113
Taxes
Illegality
Increased Costs and Reduction of Return
Funding Losses
Inability to Determine Rates
Reserves on LIBOR Rate Loans
Certificates of Lenders
113
116
117
118
119
120
120
ARTICLE XI. DEFINITIONS
11.1
11.2
11.3
11.4
99
103
105
106
106
106
107
107
107
107
108
108
109
110
111
111
111
112
112
113
113
120
Defined Terms
Other Interpretive Provisions
Accounting Terms and Principles
Payments
120
160
161
162
iv
SCHEDULES
Schedule A
Schedule B
Schedule C
Schedule 1.1(a)
Schedule 3.5
Schedule 3.7
Schedule 3.8
Schedule 3.9
Schedule 3.11(a)
Schedule 3.11(b)
Schedule 3.11(e)
Schedule 3.12
Schedule 3.15
Schedule 3.16
Schedule 3.18
Schedule 3.19
Schedule 3.20
Schedule 3.21
Schedule 3.22
Schedule 3.23
Schedule 3.25
Schedule 4.6
Schedule 5.1
Schedule 5.4
Schedule 5.5
Schedule 5.6
Schedule 5.9
Schedule 5.14
Schedule 11.1
U.S. Borrowers
Mortgaged Properties
Existing Letters of Credit
Revolving Loan Commitments
Litigation
Pension Plans and ERISA
Closing Date Sources and Uses; Funds Flow Memorandum
Ownership of Property; Liens
Historical Financial Statements
Pro Forma Financial Statements
Projections
Environmental
Labor Relations
Intellectual Property
Insurance
Ventures, Subsidiaries and Affiliates; Outstanding Stock
Jurisdiction of Organization; Chief Executive Office
Locations of Inventory, Equipment and Books and Records
Deposit Accounts and Other Accounts
Government Contracts
Bonding
Additional Insurance Requirements
Liens
Investments
Indebtedness
Transactions with Affiliates
Contingent Obligations
Post-Closing Name Changes
Prior Indebtedness
EXHIBITS
Exhibit 1.1(b)
Exhibit 1.1(c)
Exhibit 1.6
Exhibit 2.1
Exhibit 4.2(b)
Exhibit 4.2(m)
Exhibit 11.1(a)
Exhibit 11.1(b)
Exhibit 11.1(c)
Exhibit 11.1(d)
Exhibit 11.1(e)
Form of L/C Request
Form of U.S. Swingline Loan Request
Form of Notice of Conversion/Continuation
Closing Checklist
Form of Compliance Certificate
Form of Applicable Margin Certificate
Form of Assignment
Form of Borrowing Base Certificate
Form of Notice of Borrowing
Form of Revolving Note
Form of Swingline Note
v
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (including all exhibits and schedules hereto, as the same may be amended, modified
and/or restated from time to time, this “ Agreement ”) is entered into as of February 27, 2015, by and among ALERIS RECYCLING, INC. , a
Delaware corporation, to be known as Real Alloy Recycling, Inc., a Delaware corporation, on the Closing Date (“ Real Alloy Recycling ”), in
its capacity as a U.S. Borrower and as the Borrower Representative, each of the other Persons identified on Schedule A as U.S. Borrowers
(together with Real Alloy Recycling, collectively, the “ U.S. Borrowers ” and individually, a “ U.S. Borrower ”), ALERIS SPECIFICATION
ALLOY PRODUCTS CANADA COMPANY , a company organized under the laws of Canada, to be known as Real Alloy Canada Ltd., a
company organized under the laws of Nova Scotia, on the Closing Date (the “ Canadian Borrower ”; together with the U.S. Borrowers,
collectively, the “ Borrowers ” and individually, a “ Borrower ”), the other Persons party hereto that are designated as a “ Credit Party ”,
GENERAL ELECTRIC CAPITAL CORPORATION , a Delaware corporation (in its individual capacity, “ GE Capital ”), as Agent for the
Lenders and for itself as a Lender (including as Swingline Lender), and such Lenders as may be party to this Agreement from time to time.
W I T N E S S E T H:
WHEREAS , the Borrowers have requested, and the Lenders have agreed to make available to the Borrowers, certain revolving credit
facilities upon and subject to the terms and conditions set forth in this Agreement to (a) fund a portion of the acquisition (the “ Closing Date
Acquisition ”) of Real Alloy Recycling, Aleris Specification Alloy Products Canada Company, a company organized under the laws of Canada,
Aleris Recycling (German Works) GmbH, a limited liability company organized under the laws of Germany, Aleris Nuevo Leon, S. de R.L. de
D.V., a limited liability company organized under the laws of Mexico, Aleris Recycling (Swansea) Ltd., a limited company organized under the
laws of England and Wales, and Aleris Aluminum Norway AS, a limited liability company organized under the laws of Norway and certain
other direct and indirect Subsidiaries of the foregoing entities (collectively, the “ Acquired Business ”) pursuant to the terms of the Purchase
Agreement, (b) refinance Prior Indebtedness, (c) provide for working capital, capital expenditures and other general corporate purposes of the
Borrowers and (d) fund certain fees and expenses associated with the funding of the Loans and consummation of the Related Transactions;
WHEREAS , the U.S. Borrowers desire to secure all of the Obligations under the Loan Documents by granting to Agent, for the benefit
of the Secured Parties, a security interest in and lien upon the U.S. Collateral;
WHEREAS , the Canadian Borrower desires to secure all of the Canadian Obligations under the Loan Documents by granting to Agent,
for the benefit of the Secured Parties, a security interest in and lien upon the Canadian Collateral;
1
WHEREAS , Real Alloy Holding, Inc. (f/k/a SGH Acquisition Holdco, Inc., and a successor by merger to SGH Escrow Corporation), a
Delaware corporation (“ Real Alloy Acquisition ”) that directly or indirectly owns all of the Stock and Stock Equivalents of the Borrowers, and
Real Alloy Intermediate Holding, LLC, a Delaware limited liability company (“ Holdings ”) that directly owns all of the Stock and Stock
Equivalents of Real Alloy Acquisition, are willing to guaranty all of the Obligations and to pledge to Agent, for the benefit of the Secured
Parties, all of the Stock and Stock Equivalents of the Borrowers and substantially all of its other Property to secure the Obligations;
WHEREAS , subject to the terms hereof, (i) each U.S. Subsidiary of Holdings which is not a U.S. Borrower (other than any Excluded
Domestic Subsidiaries and IMSAMET of Arizona) is willing to guaranty all of the Obligations of all of the Borrowers and to grant to Agent,
for the benefit of the Secured Parties, a security interest in and lien upon all of its U.S. Collateral to secure its obligations under such guaranty
and (ii) each Canadian Subsidiary of Holdings which is not a Canadian Borrower is willing to guaranty all of the Obligations of the Canadian
Borrower and to grant to Agent, for the benefit of the Secured Parties, a security interest in and lien upon all of its Canadian Collateral to secure
its obligations under such guaranty; and
WHEREAS , in connection with the Closing Date Acquisition, Holdings, Real Alloy Acquisition and certain of its Subsidiaries have
entered into that certain Indenture dated January 8, 2015 (as supplemented by the First Supplemental Indenture, dated as of the date hereof and
as further amended, amended and restated, refinanced, supplemented or otherwise modified from time to time in accordance with the terms of
the Intercreditor Agreement, the “ Indenture ”), by and among Holdings, Real Alloy Acquisition, certain of its Subsidiaries and Wilmington
Trust, National Association, in its capacity as trustee and collateral agent (“ Notes Collateral Trustee ”), pursuant to which $305,000,000
aggregate principal amount of 10.00% senior notes will be issued by Real Alloy Acquisition (the “ Bonds ”).
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as
follows:
ARTICLE I.
THE CREDITS
1.1 Amounts and Terms of Commitments.
(a) The Revolving Credit .
(i) Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the
Credit Parties contained herein, each Lender severally and not jointly agrees to make (A) Loans denominated in Dollars to the U.S. Borrowers
(each such Loan, a “ U.S. Revolving Loan ”) and (B) Loans denominated in Dollars or Canadian Dollars to the Canadian Borrower (each such
Loan, a “ Canadian Revolving Loan ” and together with the U.S. Revolving Loans, collectively, the “ Revolving Loans ” and individually, a “
Revolving Loan ”) from time to time on any
2
Business Day during the period from the Closing Date through the Final Availability Date, in an aggregate amount not to exceed at any time
outstanding such Lender’s Revolving Loan Commitment, which Revolving Loan Commitment, as of the Closing Date, is set forth opposite
such Lender’s name on Schedule 1.1(a) under the heading “Revolving Loan Commitments”; provided , however , that, after giving effect to
(A) any Borrowing of any Revolving Loans, the U.S. Dollar Equivalent of the aggregate principal amount of all outstanding Revolving Loans
shall not exceed the Maximum Revolving Loan Amount, (B) any Borrowing of U.S. Revolving Loans, subject to clause (iii) below, the
aggregate principal amount of all outstanding U.S. Revolving Loans shall not exceed the Maximum U.S. Revolving Loan Amount and (C) any
Borrowing of Canadian Revolving Loans, subject to clause (iii) below, the U.S. Dollar Equivalent of the aggregate principal amount of all
outstanding Canadian Revolving Loans shall not exceed the Maximum Canadian Revolving Loan Amount. The “ Maximum U.S. Revolving
Loan Amount ” from time to time will be the U.S. Borrowing Base (as calculated pursuant to the Borrowing Base Certificate) in effect from
time to time, less the sum of (A) the aggregate amount of Letter of Credit Obligations for all U.S. Letters of Credit plus (B) outstanding U.S.
Swingline Loans. The “ Maximum Canadian Revolving Loan Amount ” from time to time will be the Canadian Borrowing Base (as calculated
pursuant to the Borrowing Base Certificate) in effect from time to time, less the U.S. Dollar Equivalent of the aggregate amount of Letter of
Credit Obligations for all Canadian Letters of Credit. The “ Maximum Revolving Loan Amount ” from time to time will be the sum of (A) the
Maximum U.S. Revolving Loan Amount plus (B) the Maximum Canadian Revolving Loan Amount.
(ii) [Intentionally Omitted.]
(iii) If the Borrower Representative requests that Lenders make, or permit to remain outstanding U.S. Revolving Loans in
excess of the U.S. Borrowing Base (less the sum of (x) the aggregate amount of Letter of Credit Obligations for all U.S. Letters of Credit plus
(y) outstanding U.S. Swingline Loans) (any such excess U.S. Revolving Loan is herein referred to as a “ U.S. Overadvance ”) or Canadian
Revolving Loans in excess of the Canadian Borrowing Base (less the aggregate amount of Letter of Credit Obligations for all Canadian Letters
of Credit) (any such excess Canadian Revolving Loan is herein referred to as a “ Canadian Overadvance ” and each U.S. Overadvance and
Canadian Overadvance is herein referred to as an “ Overadvance ” and collectively as the “ Overadvances ”), Agent may, in its sole discretion,
elect that the Lenders make, or permit to remain outstanding such Overadvance; provided , however , that Agent may not cause Lenders to
make, or permit to remain outstanding, (A) aggregate Revolving Loans (including Overadvances) the U.S. Dollar Equivalent of the aggregate
principal amount of which is in excess of the Aggregate Revolving Loan Commitment less the sum of outstanding U.S. Swingline Loans plus
the aggregate amount of Letter of Credit Obligations, (B) any Overadvances the U.S. Dollar Equivalent of the aggregate principal amount of
which is in excess of 10% of the Aggregate Revolving Loan Commitment or (C) any Canadian Overadvances the U.S. Dollar Equivalent of the
aggregate principal amount of which is in excess of 10% of the Canadian Revolving Loan Sublimit. No Overadvance shall remain outstanding
for more than ninety (90) consecutive days during any one hundred eighty (180) day period. If an
3
Overadvance is made, or permitted to remain outstanding, pursuant to the preceding sentence, then all Lenders shall be bound to make, or
permit to remain outstanding, such Overadvance based upon their Commitment Percentage of the Aggregate Revolving Loan Commitment in
accordance with the terms of this Agreement, regardless of whether the conditions to lending set forth in Section 2.2 have been met.
Furthermore, the Required Lenders may prospectively revoke Agent’s ability to make or permit Overadvances by written notice to Agent. All
Overadvances shall constitute Base Rate Loans or Canadian Index Rate Loans, as applicable, and shall bear interest at the Base Rate or the
Canadian Index Rate, as the case may be, plus the Applicable Margin for Revolving Loans and the default rate under Section 1.3(c) , and shall
be due and payable upon demand of Agent.
(b) Letters of Credit .
(i) Conditions . On the terms and subject to the conditions contained herein, Borrower Representative may request that one
or more L/C Issuers Issue, in accordance with such L/C Issuers’ usual and customary business practices and for the account of (A) the U.S.
Borrowers, Letters of Credit denominated in Dollars (each such Letter of Credit, a “ U.S. Letter of Credit ”) or (B) the Canadian Borrower,
Letters of Credit denominated in Dollars or Canadian Dollars (each such Letter of Credit, a “ Canadian Letter of Credit ”), from time to time on
any Business Day during the period from the Closing Date through the earlier of (x) the Final Availability Date and (y) seven (7) days prior to
the date specified in clause (a) of the definition of Revolving Termination Date; provided , however , that no L/C Issuer shall Issue any Letter
of Credit upon the occurrence of any of the following or, if after giving effect to such Issuance:
(1) (a) the U.S. Dollar Equivalent of the aggregate outstanding principal balance of Revolving Loans would exceed the Maximum
Revolving Loan Amount, (b) with respect to the Issuance of U.S. Letters of Credit, the aggregate outstanding principal balance of U.S.
Revolving Loans would exceed the Maximum U.S. Revolving Loan Amount, (c) with respect to the Issuance of a Canadian Letter of
Credit, (i) the U.S. Dollar Equivalent of the aggregate outstanding principal balance of Canadian Revolving Loans would exceed the
Maximum Canadian Revolving Loan Amount or (ii) the U.S. Dollar Equivalent of the Letter of Credit Obligations for all Canadian
Letters of Credit would exceed $5,000,000 (the “ Canadian L/C Sublimit ”) or (d) U.S. Dollar Equivalent of the Letter of Credit
Obligations for all Letters of Credit would exceed $25,000,000 (the “ L/C Sublimit ”);
(2) the expiration date of such Letter of Credit (a) is not a Business Day, (b) is more than one year after the date of Issuance thereof
or (c) is later than seven (7) days prior to the date specified in clause (a) of the definition of Revolving Termination Date; provided ,
however , that any Letter of Credit with a term not exceeding one year may provide for its renewal for additional periods not exceeding
one year as long as (i) each Applicable Borrower and such L/C Issuer have the option to prevent such renewal before the expiration of
such term or any such period and (ii) neither such L/C Issuer nor any Borrower shall permit any such renewal to extend such expiration
date beyond the date set forth in clause (c) above; or
4
(3) (i) any fee due in connection with, and on or prior to, such Issuance has not been paid, (ii) such Letter of Credit is requested to
be Issued in a form that is not acceptable to such L/C Issuer or (iii) such L/C Issuer shall not have received, each in form and substance
reasonably acceptable to it and duly executed by the Applicable Borrower or the Borrower Representative on its behalf, the documents
that such L/C Issuer generally uses in the Ordinary Course of Business for the Issuance of letters of credit of the type of such Letter of
Credit (collectively, the “ L/C Reimbursement Agreement ”).
For each Issuance, the applicable L/C Issuer may, but shall not be required to, determine that, or take notice whether, the conditions precedent
set forth in Section 2.2 have been satisfied or waived in connection with the Issuance of any Letter of Credit; provided , however , that no
Letter of Credit shall be Issued during the period starting on the first Business Day after the receipt by such L/C Issuer of notice from Agent or
the Required Lenders that any condition precedent contained in Section 2.2 is not satisfied and ending on the date all such conditions are
satisfied or duly waived.
Notwithstanding anything else to the contrary herein, if any Lender is a Non-Funding Lender or Impacted Lender, no L/C Issuer shall be
obligated to Issue any Letter of Credit unless (w) the Non-Funding Lender or Impacted Lender has been replaced in accordance with
Section 9.9 or 9.22 , (x) the Letter of Credit Obligations of such Non-Funding Lender or Impacted Lender have been cash collateralized, (y) the
Revolving Loan Commitments of the other Lenders have been increased by an amount sufficient to satisfy Agent that all future Letter of Credit
Obligations will be covered by all Lenders that are not Non-Funding Lenders or Impacted Lenders, or (z) the Letter of Credit Obligations of
such Non-Funding Lender or Impacted Lender have been reallocated to other Lenders in a manner consistent with Section 1.11(e)(ii) .
(ii) Notice of Issuance . The Borrower Representative shall give the relevant L/C Issuer and Agent a notice of any requested
Issuance of any Letter of Credit, which shall be effective only if received by such L/C Issuer and Agent not later than 2:00 p.m. on the third
Business Day prior to the date of such requested Issuance. Such notice shall be made in a writing or Electronic Transmission substantially in
the form of Exhibit 1.1(b) duly completed or in any other written form acceptable to such L/C Issuer (each, an “ L/C Request ”).
(iii) Reporting Obligations of L/C Issuers . Each L/C Issuer agrees to provide Agent, in form and substance satisfactory to
Agent, each of the following on the following dates: (A) (i) on or prior to any Issuance of any Letter of Credit by such L/C Issuer,
(ii) immediately after any drawing under any such Letter of Credit or (iii) immediately after any payment (or failure to pay when due) by any
Borrower of any related L/C Reimbursement Obligation, notice thereof, which shall contain a reasonably detailed description of such Issuance,
drawing or payment, and Agent shall provide copies of such notices to each Lender reasonably promptly after
5
receipt thereof; (B) upon the request of Agent (or any Lender through Agent), copies of any Letter of Credit Issued by such L/C Issuer and any
related L/C Reimbursement Agreement and such other documents and information as may reasonably be requested by Agent; and (C) on the
first Business Day of each calendar week, a schedule of the Letters of Credit Issued by such L/C Issuer, in form and substance reasonably
satisfactory to Agent, setting forth the Letter of Credit Obligations for such Letters of Credit outstanding on the last Business Day of the
previous calendar week.
(iv) Acquisition of Participations . Upon any Issuance of a Letter of Credit in accordance with the terms of this Agreement
resulting in any increase in the Letter of Credit Obligations, each Lender shall be deemed to have acquired, without recourse or warranty, an
undivided interest and participation in such Letter of Credit and the related Letter of Credit Obligations in an amount equal to its Commitment
Percentage of such Letter of Credit Obligations.
(v) Reimbursement Obligations of the Borrowers . The U.S. Borrowers agree to pay to the L/C Issuer of any U.S. Letter of
Credit, or to Agent for the benefit of such L/C Issuer, each L/C Reimbursement Obligation owing with respect to such U.S. Letter of Credit and
the Canadian Borrower agrees to pay to the L/C Issuer of any Canadian Letter of Credit, in the applicable currency, each L/C Reimbursement
Obligation owing with respect to such Canadian Letter of Credit, no later than the first Business Day after the Applicable Borrower or the
Borrower Representative receives notice from such L/C Issuer or from Agent that payment has been made under such Letter of Credit or that
such L/C Reimbursement Obligation is otherwise due (the “ L/C Reimbursement Date ”) with interest thereon computed as set forth in clause
(A) below. In the event that any L/C Reimbursement Obligation is not repaid by the Applicable Borrower as provided in this clause (v) (or
any such payment by the Applicable Borrower is rescinded or set aside for any reason), such L/C Issuer shall promptly notify Agent of such
failure (and, upon receipt of such notice, Agent shall notify each Lender) and, irrespective of whether such notice is given, such L/C
Reimbursement Obligation shall be payable on demand by the Applicable Borrower with interest thereon computed (A) from the date on which
such L/C Reimbursement Obligation arose to the L/C Reimbursement Date, at the interest rate applicable during such period to Revolving
Loans that are Base Rate Loans (if such L/C Reimbursement Obligations are denominated in Dollars) or Canadian Index Rate Loans (if such
L/C Reimbursement Obligations are denominated in Canadian Dollars), and (B) thereafter until payment in full, at the interest rate applicable
during such period to past due Revolving Loans that are Base Rate Loans (if such L/C Reimbursement Obligations are denominated in Dollars)
or Canadian Index Rate Loans (if such L/C Reimbursement Obligations are denominated in Canadian Dollars).
(vi) Reimbursement Obligations of the Lenders .
(A) Upon receipt of the notice described in clause (v) above from Agent, each Lender shall pay to Agent for the
account of such L/C Issuer its Commitment Percentage of such Letter of Credit Obligations (as such amount may be increased pursuant to
Section 1.11(e)(ii) ).
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(B) By making any payments described in clause (A) above (other than during the continuation of an Event of Default
under Section 7.1(f) or 7.1(g) ), such Lender shall be deemed to have made a Revolving Loan to the Applicable Borrower, which, upon receipt
thereof by Agent for the benefit of such L/C Issuer, such Borrower shall be deemed to have used in whole to repay such L/C Reimbursement
Obligation. Any such payment that is not deemed a Revolving Loan shall be deemed a funding by such Lender of its participation in the
applicable Letter of Credit and the Letter of Credit Obligation in respect of the related L/C Reimbursement Obligations. Such participation
shall not otherwise be required to be funded. Following receipt by any L/C Issuer of any payment from any Lender pursuant to this clause
(vi) with respect to any portion of any L/C Reimbursement Obligation, such L/C Issuer shall promptly pay to Agent, for the benefit of such
Lender, all amounts received by such L/C Issuer (or to the extent such amounts shall have been received by Agent for the benefit of such L/C
Issuer, Agent shall promptly pay to such Lender all amounts received by Agent for the benefit of such L/C Issuer) with respect to such portion.
(vii) Obligations Absolute . The obligations of the Borrowers and the Lenders pursuant to clauses (iv) , (v) and (vi) above
shall be absolute, unconditional and irrevocable and performed strictly in accordance with the terms of this Agreement irrespective of
(A) (i) the invalidity or unenforceability of any term or provision in any Letter of Credit, any document transferring or purporting to transfer a
Letter of Credit, any Loan Document (including the sufficiency of any such instrument), or any modification to any provision of any of the
foregoing, (ii) any document presented under a Letter of Credit being forged, fraudulent, invalid, insufficient or inaccurate in any respect or
failing to comply with the terms of such Letter of Credit or (iii) any loss or delay, including in the transmission of any document, (B) the
existence of any setoff, claim, abatement, recoupment, defense or other right that any Person (including any Credit Party) may have against the
beneficiary of any Letter of Credit or any other Person, whether in connection with any Loan Document or any other Contractual Obligation or
transaction, or the existence of any other withholding, abatement or reduction, (C) in the case of the obligations of any Lender, (i) the failure of
any condition precedent set forth in Section 2.2 to be satisfied (each of which conditions precedent the Lenders hereby irrevocably waive) or
(ii) any adverse change in the condition (financial or otherwise) of any Credit Party and (D) any other act or omission to act or delay of any
kind of Agent, any Lender or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing,
that might, but for the provisions of this clause (vii) , constitute a legal or equitable discharge of any obligation of the Borrowers or any Lender
hereunder. No provision hereof shall be deemed to waive or limit the Borrowers’ right to seek repayment of any payment of any L/C
Reimbursement Obligations from the L/C Issuer under the terms of the applicable L/C Reimbursement Agreement or applicable law.
(c) Swingline Loans .
(i) Availability . Subject to the terms and conditions of this Agreement and in reliance upon the representations and
warranties of the Credit Parties contained herein, the Swingline Lender may, in its sole discretion, make Loans
7
denominated in Dollars available to the U.S. Borrowers (each a “ U.S. Swingline Loan ”) under the Revolving Loan Commitments from time to
time on any Business Day during the period from the Closing Date through the Final Availability Date in an aggregate principal amount at any
time outstanding not to exceed the U.S. Swingline Limit; provided , however , that the Swingline Lender may not make any U.S. Swingline
Loan (1) to the extent that after giving effect to such U.S. Swingline Loan, the U.S. Dollar Equivalent of the aggregate principal amount of all
Revolving Loans would exceed the Maximum Revolving Loan Amount, (2) with respect to any U.S. Swingline Loan, to the extent that after
giving effect to such U.S. Swingline Loan, the aggregate principal amount of all U.S. Revolving Loans would exceed the Maximum U.S.
Revolving Loan Amount, and (3) during the period commencing on the first Business Day after it receives notice from Agent or the Required
Lenders that one or more of the conditions precedent contained in Section 2.2 are not satisfied and ending when such conditions are satisfied or
duly waived. In connection with the making of any U.S. Swingline Loan, the Swingline Lender may but shall not be required to determine that,
or take notice whether, the conditions precedent set forth in Section 2.2 have been satisfied or waived. Each U.S. Swingline Loan denominated
in Dollars shall be a Base Rate Loan and must be repaid as provided herein, but in any event must be repaid in full on the Revolving
Termination Date. Within the limits set forth in the first sentence of this clause (i) , amounts of U.S. Swingline Loans repaid may be
reborrowed under this clause (i) .
(ii) Borrowing Procedures . In order to request a U.S. Swingline Loan, the Borrower Representative shall give to Agent a
notice to be received not later than 2:00 p.m. on the day of the proposed Borrowing, which shall be made in a writing or in an Electronic
Transmission substantially in the form of Exhibit 1.1(c) or in a writing in any other form acceptable to Agent duly completed (a “ U.S.
Swingline Request ”). In addition, if any Notice of Borrowing of Revolving Loans requests a Borrowing of Base Rate Loans, the Swingline
Lender may, notwithstanding anything else to the contrary herein, make a U.S. Swingline Loan to the applicable U.S. Borrower in an aggregate
amount not to exceed such proposed Borrowing, and the aggregate amount of the corresponding proposed Borrowing shall be reduced
accordingly by the principal amount of such U.S. Swingline Loan. Agent shall promptly notify the Swingline Lender of the details of the
requested U.S. Swingline Loan. Upon receipt of such notice and subject to the terms of this Agreement, the Swingline Lender may make a U.S.
Swingline Loan available to the applicable U.S. Borrower by making the proceeds thereof available to Agent and, in turn, Agent shall make
such proceeds available to the applicable U.S. Borrower on the date set forth in the relevant U.S. Swingline Request or Notice of Borrowing.
(iii) Refinancing U.S. Swingline Loans .
(A) The Swingline Lender may at any time (and shall, no less frequently than once each week) forward a demand to
Agent (which Agent shall, upon receipt, forward to each Lender) that each Lender pay to Agent, for the account of the Swingline Lender, such
Lender’s Commitment Percentage of the outstanding U.S. Swingline Loans (as such amount may be increased pursuant to Section 1.11(e)(ii) ).
8
(B) Each Lender shall pay the amount owing by it to Agent for the account of the Swingline Lender on the Business
Day following receipt of the notice or demand therefor. Payments received by Agent after 1:00 p.m. may, in Agent’s discretion, be deemed to
be received on the next Business Day. Upon receipt by Agent of such payment (other than during the continuation of any Event of Default
under Section 7.1(f) or 7.1(g) ), such Lender shall be deemed to have made a Revolving Loan to the applicable U.S. Borrower, which, upon
receipt of such payment by the Swingline Lender from Agent, such Borrower shall be deemed to have used in whole to refinance such U.S.
Swingline Loan. In addition, regardless of whether any such demand is made, upon the occurrence of any Event of Default under Section 7.1(f)
or 7.1(g) , each Lender shall be deemed to have acquired, without recourse or warranty, an undivided interest and participation in each U.S.
Swingline Loan in an amount equal to such Lender’s Commitment Percentage of such U.S. Swingline Loan. If any payment made by any
Lender as a result of any such demand is not deemed a Revolving Loan, such payment shall be deemed a funding by such Lender of such
participation. Such participation shall not be otherwise required to be funded. Upon receipt by the Swingline Lender of any payment from any
Lender pursuant to this clause (iii) with respect to any portion of any U.S. Swingline Loan, the Swingline Lender shall promptly pay over to
such Lender all payments of principal (to the extent received after such payment by such Lender) and interest (to the extent accrued with
respect to periods after such payment) on account of such U.S. Swingline Loan received by the Swingline Lender with respect to such portion.
(iv) Obligation to Fund Absolute . Each Lender’s obligations pursuant to clause (iii) above shall be absolute, unconditional
and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever,
including (A) the existence of any setoff, claim, abatement, recoupment, defense or other right that such Lender, any Affiliate thereof or any
other Person may have against the Swingline Lender, Agent, any other Lender or L/C Issuer or any other Person, (B) the failure of any
condition precedent set forth in Section 2.2 to be satisfied or the failure of the Borrower Representative to deliver a Notice of Borrowing (each
of which requirements the Lenders hereby irrevocably waive) and (C) any adverse change in the condition (financial or otherwise) of any
Credit Party.
1.2 Evidence of Loans; Notes .
(a) The Revolving Loans made by each Lender are evidenced by this Agreement and, if requested by such Lender, a Revolving
Note payable to such Lender in an amount equal to such Lender’s Revolving Loan Commitment.
(b) U.S. Swingline Loans made by the Swingline Lender are evidenced by this Agreement and, if requested by such Lender, a
Swingline Note in an amount equal to the U.S. Swingline Limit.
9
1.3 Interest .
(a) Subject to Sections 1.3(c) and 1.3(d) , each Loan shall bear interest on the outstanding principal amount thereof from the date
when made at a rate per annum equal to LIBOR, the Base Rate, the BA Rate or the Canadian Index Rate, as the case may be, plus the
Applicable Margin; provided that (i) Revolving Loans denominated in Dollars shall be either Base Rate Loans or LIBOR Rate Loans,
(ii) Revolving Loans denominated in Canadian Dollars shall be either BA Rate Loans or Canadian Index Rate Loans and (iii) U.S. Swingline
Loans shall be Base Rate Loans. Each determination of an interest rate by Agent shall be conclusive and binding on each Borrower and the
Lenders in the absence of manifest error. All computations of fees and interest (other than interest accruing on Base Rate Loans, BA Rate
Loans and Canadian Index Rate Loans) payable under this Agreement shall be made on the basis of a 360-day year and actual days elapsed. All
computations of interest accruing on Base Rate Loans, BA Rate Loans and Canadian Index Rate Loans payable under this Agreement shall be
made on the basis of a 365-day year (366 days in the case of a leap year) and actual days elapsed. Interest and fees shall accrue during each
period during which interest or such fees are computed from the first day thereof to the last day thereof. For purposes of disclosure pursuant to
the Interest Act (Canada), in respect of the Canadian Obligations only, the annual rates of interest or fees to which the rates of interest or fees
provided in this Agreement and the other Loan Documents (and stated herein or therein, as applicable, to be computed on the basis of a 360 day
year or any other period of time less than a calendar year) are equivalent are the rates so determined multiplied by the actual number of days in
the applicable calendar year and divided by 360 or such other period of time, respectively.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment Date for such Loan. Interest shall also be paid on the date
of any payment or prepayment of Revolving Loans on the Revolving Termination Date.
(c) At the election of the Required Lenders while any Event of Default exists (or automatically while any Event of Default under
Section 7.1(a) , 7.1(f) or 7.1(g) exists), the U.S. Borrowers, jointly and severally in respect of all Loans, and the Canadian Borrower, subject to
the Interest Act (Canada), in respect of Loans that are Canadian Obligations, shall pay interest (after as well as before entry of judgment
thereon to the extent permitted by law) on the Loans and past due interest thereon, if any, under the Loan Documents from and after the date of
occurrence of such Event of Default, at a rate per annum which is determined by adding two percent (2.0%) per annum to the Applicable
Margin then in effect for such Loans (plus LIBOR, the Base Rate, the BA Rate or the Canadian Index Rate as the case may be) subject to the
Interest Act (Canada), in the case of Canadian Obligations. All such interest shall be payable in cash on demand of Agent or the Required
Lenders.
(d) Anything herein to the contrary notwithstanding, the obligations of the Borrowers hereunder shall be subject to the limitation
that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the respective Lender would be contrary to the provisions of any law applicable to such
Lender limiting the highest rate of interest which may be lawfully contracted for, charged or received by such Lender, and in such event the
Borrowers shall pay such Lender interest at the highest rate permitted by applicable law (“ Maximum Lawful Rate ”); provided , however ,
10
that if at any time thereafter the rate of interest payable hereunder is less than the Maximum Lawful Rate, the Borrowers shall continue to pay
interest hereunder at the Maximum Lawful Rate until such time as the total interest received by Agent, on behalf of Lenders, is equal to the
total interest that would have been received had the interest payable hereunder been (but for the operation of this paragraph) the interest rate
payable since the Closing Date as otherwise provided in this Agreement.
(e) For greater certainty but without limitation to Section 1.3(d) and in respect of Canadian Obligations or Obligations enforced in
Canada only, if any provision of this Agreement or of any of the other Loan Documents would obligate a Borrower or any other Credit Party to
make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by law or
would result in a receipt by such Lender of interest at a criminal rate (as such terms are construed under the Criminal Code (Canada)) then,
notwithstanding such provisions, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by such Lender of interest at a criminal rate,
such adjustment to be effected, to the extent necessary, as follows: (1) firstly, by reducing the amount or rate of interest required to be paid to
such Lender under this Agreement, and (2) thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid to
such Lender which would constitute “interest” for purposes of Section 347 of the Criminal Code (Canada). Any amount or rate of interest
referred to in this Section 1.3(e) shall be determined in accordance with generally accepted actuarial practices and principles as an effective
annual rate of interest over the term that the applicable Loan remains outstanding on the assumption that any charges, fees or expenses that fall
within the meaning of “interest” (as defined in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be prorated over
that period of time and otherwise be pro-rated over the period from the Closing Date to the Revolving Termination Date and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by Agent shall be conclusive for the purposes of such
determination.
1.4 Loan Accounts .
(a) Agent, on behalf of the Lenders, shall record on its books and records the amount of each Loan made, the interest rate
applicable, all payments of principal and interest thereon and the principal balance thereof from time to time outstanding. Agent shall deliver to
the Borrower Representative on a monthly basis a loan statement setting forth such record for the immediately preceding calendar month. Such
record shall, absent manifest error, be conclusive evidence of the amount of the Loans made by the Lenders to the Borrowers and the interest
and payments thereon. Any failure to so record or any error in doing so, or any failure to deliver such loan statement shall not, however, limit
or otherwise affect the obligation of the Borrowers hereunder (and under any Note) to pay any amount owing with respect to the Loans or
provide the basis for any claim against Agent.
11
(b) Agent, acting as a non-fiduciary agent of the Borrowers solely for tax purposes and solely with respect to the actions described
in this Section 1.4(b) , shall establish and maintain at its address referred to in Section 9.2 (or at such other address as Agent may notify the
Borrower Representative) (A) a record of ownership (the “ Register ”) in which Agent agrees to register by book entry the interests (including
any rights to receive payment hereunder) of Agent, each Lender and each L/C Issuer in the Revolving Loans, U.S. Swingline Loans, L/C
Reimbursement Obligations, and Letter of Credit Obligations, each of their obligations under this Agreement to participate in each Loan, Letter
of Credit, Letter of Credit Obligations, and L/C Reimbursement Obligations, and any assignment of any such interest, obligation or right and
(B) accounts in the Register in accordance with its usual practice in which it shall record (1) the names and addresses of the Lenders and the
L/C Issuers (and each change thereto pursuant to Sections 9.9 and 9.22 ), (2) the Commitments of each Lender, (3) the amount of each Loan
and each funding of any participation described in clause (A) above, and for LIBOR Rate Loans and BA Rate Loans, the Interest Period
applicable thereto, (4) the amount of any principal or interest due and payable or paid, (5) the amount of the L/C Reimbursement Obligations
due and payable or paid in respect of Letters of Credit and (6) any other payment received by Agent from a Borrower or other Credit Party and
its application to the Obligations.
(c) Notwithstanding anything to the contrary contained in this Agreement, the Loans (including any Notes evidencing such Loans
and, in the case of Revolving Loans, the corresponding obligations to participate in Letter of Credit Obligations and U.S. Swingline Loans) and
the L/C Reimbursement Obligations are registered obligations, the right, title and interest of the Lenders and the L/C Issuers and their assignees
in and to such Loans or L/C Reimbursement Obligations, as the case may be, shall be transferable only upon notation of such transfer in the
Register and no assignment thereof shall be effective until recorded therein. This Section 1.4 and Section 9.9 shall be construed so that the
Loans and L/C Reimbursement Obligations are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2)
and 881(c)(2) of the Code.
(d) The Credit Parties, Agent, the Lenders and the L/C Issuers shall treat each Person whose name is recorded in the Register as a
Lender or L/C Issuer, as applicable, for all purposes of this Agreement. Information contained in the Register with respect to any Lender or any
L/C Issuer shall be available for access by the Borrowers, the Borrower Representative, Agent, such Lender or such L/C Issuer during normal
business hours and from time to time upon at least one Business Day’s prior notice. No Lender or L/C Issuer shall, in such capacity, have
access to or be otherwise permitted to review any information in the Register other than information with respect to such Lender or L/C Issuer
unless otherwise agreed by Agent.
1.5 Procedure for Revolving Credit Borrowing .
(a) Each Borrowing of a Revolving Loan shall be made upon the Borrower Representative’s irrevocable (subject to Section 10.5 )
written notice delivered to Agent substantially in the form of a Notice of Borrowing or in a writing in any other form acceptable to Agent,
which notice must be received by Agent prior to 2:00 p.m. (or 1:00 p.m. solely with respect to Canadian Index Rate Loans) (i) on the date
which is three
12
(3) Business Days prior to the requested Borrowing date in the case of each LIBOR Rate Loan or BA Rate Loan, (ii) on the date which is one
(1) Business Day prior to the requested Borrowing date of each Base Rate Loan equal to or greater than $20,000,000 and (iii) on the requested
Borrowing date in the case of each Base Rate Loan less than $20,000,000 or Canadian Index Rate Loan. Such Notice of Borrowing shall
specify:
(i) the amount of the Borrowing (which shall be in an aggregate minimum principal amount of $100,000 or C$100,000, as
applicable);
(ii) the requested Borrowing date, which shall be a Business Day;
(iii) whether the Borrowing is to be comprised of U.S. Revolving Loans or Canadian Revolving Loans;
(iv) whether the Borrowing is to be comprised of LIBOR Rate Loans, Base Rate Loans, BA Rate Loans or Canadian Index
Rate Loans; and
(v) if the Borrowing is to be LIBOR Rate Loans or BA Rate Loans, the Interest Period applicable to such Loans.
(b) Upon receipt of a Notice of Borrowing, Agent will promptly notify each Lender of such Notice of Borrowing and of the amount
of such Lender’s Commitment Percentage of the Borrowing.
(c) Unless Agent is otherwise directed in writing by the Borrower Representative, the proceeds of each requested Borrowing after
the Closing Date will be made available to the Applicable Borrower by Agent by wire transfer of such amount to the Applicable Borrower
pursuant to the wire transfer instructions specified on the signature page hereto.
(d) For greater certainty, LIBOR Rate Loans and Base Rate Loans are available only in Dollars and BA Rate Loans and Canadian
Index Rate Loans are available only in Canadian Dollars.
1.6 Conversion and Continuation Elections .
(a) The Applicable Borrower shall have the option to (i) request that any Revolving Loan denominated in Dollars be made as a
LIBOR Rate Loan or any Revolving Loan denominated in Canadian Dollars be made as a BA Rate Loan, (ii) convert at any time all or any part
of outstanding (x) Base Rate Loans (other than U.S. Swingline Loans) from Base Rate Loans to LIBOR Rate Loans or (y) Canadian Index Rate
Loans from Canadian Index Rate Loans to BA Rate Loans, (iii) convert any (x) LIBOR Rate Loan to a Base Rate Loan or (y) BA Rate Loan to
a Canadian Index Rate Loan, subject to Section 10.4 if such conversion is made prior to the expiration of the Interest Period applicable thereto,
or (iv) continue all or any portion of any Loan as a LIBOR Rate Loan or BA Rate Loan upon the expiration of the applicable Interest Period.
Any Loan or group of Loans having the same proposed Interest Period to be made or
13
continued as, or converted into, a LIBOR Rate Loan or BA Rate Loan, as applicable, must be in a minimum amount of $250,000 or C$250,000,
as applicable. Any such election must be made by Borrower Representative by 2:00 p.m. on the third Business Day prior to (1) the date of any
proposed Revolving Loan which is to bear interest at LIBOR or the BA Rate, (2) the end of each Interest Period with respect to any LIBOR
Rate Loans or BA Rate Loans to be continued as such, respectively, or (3) the date on which the Applicable Borrower wishes to convert any
Base Rate Loan to a LIBOR Rate Loan or Canadian Index Rate Loan to a BA Rate Loan, respectively, for an Interest Period designated by the
Borrower Representative in such election. If no election is received with respect to a LIBOR Rate Loan or BA Rate Loan by 2:00 p.m. on the
third Business Day prior to the end of the Interest Period with respect thereto, that LIBOR Rate Loan or BA Rate Loan, as applicable, shall be
converted to a Base Rate Loan or Canadian Index Rate Loan, as applicable, at the end of its Interest Period. The Borrower Representative must
make such election by notice to Agent in writing, including by Electronic Transmission. In the case of any conversion or continuation, such
election must be made pursuant to a written notice (a “ Notice of Conversion/Continuation ”) substantially in the form of Exhibit 1.6 or in a
writing in any other form acceptable to Agent. No Loan shall be made, converted into or continued as a LIBOR Rate Loan or BA Rate Loan, as
applicable, if the conditions to Loans and Letters of Credit in Section 2.2 are not met at the time of such proposed conversion or continuation
and Agent or Required Lenders have determined not to make or continue any Loan as a LIBOR Rate Loan or BA Rate Loan, as applicable, as a
result thereof.
(b) Upon receipt of a Notice of Conversion/Continuation, Agent will promptly notify each Lender thereof. In addition, Agent will,
with reasonable promptness, notify the Borrower Representative and the Lenders of each determination of LIBOR or the BA Rate; provided
that any failure to do so shall not relieve any Borrower of any liability hereunder or provide the basis for any claim against Agent. All
conversions and continuations shall be made pro rata according to the respective outstanding principal amounts of the Loans held by each
Lender with respect to which the notice was given.
(c) Notwithstanding any other provision contained in this Agreement, after giving effect to any Borrowing, or to any continuation or
conversion of any Loans, there shall not be more than seven (7) different Interest Periods in effect for the U.S. Borrowers and seven
(7) different Interest Periods in effect for the Canadian Borrower.
1.7 Voluntary Prepayments . Subject to the other terms and conditions of this Agreement, the Borrowers may voluntarily prepay the
Revolving Loans and U.S. Swingline Loans at any time, subject to concurrent payments of any amounts required to be paid by the Applicable
Borrowers pursuant to Section 10.4(d), and may reborrow amounts previously repaid.
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1.8 Mandatory Prepayments of Loans and Commitment Reductions .
(a) Revolving Loan . The U.S. Borrowers, jointly and severally in respect of all of the following Obligations, and the Canadian
Borrower, in respect of all of the following Obligations that constitute Canadian Obligations, shall repay to the Lenders in full on the date
specified in clause (a) of the definition of “Revolving Termination Date” the aggregate principal amount of the Revolving Loans, the L/C
Reimbursement Obligations and the U.S. Swingline Loans outstanding on the Revolving Termination Date.
(b) Overadvances . If at any time the U.S. Dollar Equivalent of the then outstanding principal balance of Revolving Loans exceeds
the Maximum Revolving Loan Amount (other than as permitted by Section 1.1(a)(iii) ), then one or more Applicable Borrowers shall
immediately prepay outstanding Revolving Loans and then cash collateralize outstanding Letters of Credit in an amount sufficient to eliminate
such excess in accordance herewith and in a manner satisfactory to the L/C Issuers. Subject to Section 1.1(a)(iii) , if at any time the then
outstanding principal balance of U.S. Revolving Loans exceeds the Maximum U.S. Revolving Loan Amount, then the U.S. Borrowers shall
immediately prepay outstanding U.S. Revolving Loans and then cash collateralize outstanding U.S. Letters of Credit in an amount sufficient to
eliminate such excess in accordance herewith and in a manner satisfactory to the L/C Issuers. Subject to Section 1.1(a)(iii) , if at any time the
U.S. Dollar Equivalent of the then outstanding principal balance of Canadian Revolving Loans exceeds the Maximum Canadian Revolving
Loan Amount, then the Canadian Borrower shall immediately prepay outstanding Canadian Revolving Loans and then cash collateralize
outstanding Canadian Letters of Credit in an amount sufficient to eliminate such excess in accordance herewith and in a manner satisfactory to
the L/C Issuers.
(c) Asset Dispositions; Events of Loss . If a Credit Party or any Subsidiary of a Credit Party shall at any time or from time to time:
(i) make or agree to make a Disposition; or
(ii) suffer an Event of Loss;
and the aggregate amount of the Net Proceeds received by the Credit Parties and their Subsidiaries in connection with such Disposition or
Event of Loss and all other Dispositions and Events of Loss occurring during the Fiscal Year exceeds $5,000,000 (provided that any sums
received pursuant to the Tyler Swap shall not be included in the calculation for the Fiscal Year in which such transaction is consummated and
under no circumstances, shall the sums received pursuant to such transaction be required to be delivered to Agent), then (subject in all cases to
the terms of the Intercreditor Agreement) (A) the Borrower Representative shall promptly notify Agent of such proposed Disposition or Event
of Loss (including the amount of the estimated Net Proceeds (including the estimated Net Proceeds attributable to the ABL Priority Collateral
and the Notes Priority Collateral, respectively) to be received by a Credit Party and/or such Subsidiary in respect thereof) and (B) promptly
upon receipt by a Credit Party and/or such Subsidiary of the Net Proceeds of such Disposition or Event of Loss, in the case of Net Proceeds of
any ABL Priority Collateral (regardless of whether a Lien in favor of Agent has been granted thereon), such Credit Party shall deliver, or cause
to be delivered, such excess Net Proceeds to Agent for distribution to the Lenders as a prepayment of the
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Loans, which prepayment shall be applied in accordance with Section 1.8(g) . Notwithstanding the foregoing and provided no Default or Event
of Default has occurred and is continuing, such prepayment, in the case of Net Proceeds of any ABL Priority Collateral, shall not be required to
the extent a Credit Party or such Subsidiary reinvests the Net Proceeds of such Disposition or Event of Loss in productive assets constituting
ABL Priority Collateral, within one hundred eighty (180) days after the date of such Disposition or Event of Loss; provided that the Borrower
Representative notifies Agent of such Credit Party’s or such Subsidiary’s intent to reinvest and of the completion of such reinvestment at the
time such proceeds are received and when such reinvestment occurs, respectively. For the avoidance of doubt, and notwithstanding anything to
the contrary contained herein, upon the occurrence and during the continuance of any Dominion Period, an amount equal to one hundred
percent (100%) of the Net Proceeds (other than the portion thereof constituting proceeds of Notes Priority Collateral, if and to the extent that
such proceeds are required to be distributed to the Notes Collateral Trustee and applied to prepay the outstanding Notes Pari Passu Lien
Obligations pursuant to and in accordance with the Indenture Documents) received by the Credit Parties and their Subsidiaries in connection
with any Disposition or Event of Loss shall promptly upon receipt by a Credit Party and/or such Subsidiary be delivered to Agent for
distribution to the Lenders as a prepayment of the Loans, which prepayment shall be applied in accordance with Section 1.8(g) hereof.
(d) Issuance of Securities; Issuance of Indebtedness . (i) Subject to the terms of the Intercreditor Agreement, immediately upon the
receipt by any Credit Party or any Subsidiary of any Credit Party of the Net Issuance Proceeds of the issuance of Stock or Stock Equivalents
(including capital contributions) (other than from an Excluded Equity Issuance), such Credit Party shall deliver, or cause to be delivered, to
Agent an amount equal to 100% such Net Issuance Proceeds for application to the Loans in accordance with Section 1.8(g) .
(ii) Subject to the terms of the Intercreditor Agreement, immediately upon receipt by any Credit Party or any Subsidiary of
any Credit Party of the Net Issuance Proceeds of the incurrence of Indebtedness (other than Net Issuance Proceeds from the incurrence of
Indebtedness permitted hereunder), such Credit Party shall deliver, or cause to be delivered, to Agent an amount equal to such Net Issuance
Proceeds, for application to the Loans in accordance with Section 1.8(g) .
(e) [ Intentionally Omitted .]
(f) Proceeds Under Purchase Agreement . Subject to the terms of the Intercreditor Agreement, immediately upon receipt of (i) any
payment in respect of any purchase price adjustment in favor of any Credit Party (including, a payment made to a Credit Party pursuant to
Section 2.06 of the Purchase Agreement) or (ii) any indemnification payment by the Seller after the Closing Date (other than amounts paid as a
result of a claim by a Credit Party for indemnification under the Purchase Agreement to the extent that the amounts so received are applied by
such Credit Party for the purpose of (A) replacing, repairing or restoring any Properties of such Credit Party or satisfying the condition giving
rise to the claim for indemnification, (B) payment of (or
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reimbursement of payments made for) claims and settlements to third Persons not an Affiliate of or a Credit Party, or (C) otherwise covering
any out-of-pocket expenses incurred by a Credit Party in obtaining such indemnification), the Credit Party receiving such payment shall deliver
to Agent an amount equal to such payment for application to the Loans in accordance with Section 1.8(g) .
(g) Application of Prepayments . Subject to Section 1.10(c) and the terms of the Intercreditor Agreement, any prepayments pursuant
to Sections 1.8(c) , 1.8(d) , or 1.8(f) (i) of U.S. Revolving Loans shall be applied first to prepay outstanding U.S. Swingline Loans, second to
prepay outstanding U.S. Revolving Loans without permanent reduction of the Aggregate Revolving Loan Commitment and third to cash
collateralize U.S. Letters of Credit in an amount determined in accordance with Section 7.4 and (ii) of Canadian Revolving Loans shall be
applied first to prepay outstanding Canadian Revolving Loans without permanent reduction of the Aggregate Revolving Loan Commitment and
second to cash collateralize Canadian Letters of Credit in an amount determined in accordance with Section 7.4 ; provided , however , that any
prepayments pursuant to Sections 1.8(c) , (d) and (f) in respect of a Disposition or Event of Loss relating to ABL Priority Collateral owned
by (x) any U.S. Credit Party shall be applied first, to U.S. Obligations and, second, to Canadian Obligations and (y) any Canadian Credit Party
shall be applied solely to Canadian Obligations. To the extent permitted by the foregoing sentence, amounts prepaid with respect to any U.S.
Revolving Loans shall be applied first to any Base Rate Loans, then outstanding and then to outstanding LIBOR Rate Loans with the shortest
Interest Periods remaining and amounts prepaid with respect to any Canadian Revolving Loans shall be applied first to any Canadian Index
Rate Loan then outstanding and then to outstanding BA Rate Loans with the shortest Interest Periods remaining. Together with each
prepayment under this Section 1.8 , the Applicable Borrower shall pay any amounts required pursuant to Section 10.4 hereof.
(h) No Implied Consent . Provisions contained in this Section 1.8 for the application of proceeds of certain transactions shall not be
deemed to constitute consent of the Lenders to transactions that are not otherwise permitted by the terms hereof or the other Loan Documents.
1.9 Fees .
(a) Fees . The Borrowers shall pay to Agent, for Agent’s own account, fees in the amounts and at the times set forth in a letter
agreement between the Borrowers and Agent dated of even date herewith (as amended from time to time, the “ Fee Letter ”).
(b) Unused Commitment Fee . The Borrowers shall pay to Agent a fee (the “ Unused Commitment Fee ”) for the account of each
Lender in an amount equal to:
(i) the average daily balances of the Revolving Loan Commitment of such Lender during the preceding calendar month, less
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(ii) the sum of (x) the average daily balance of all Revolving Loans held by such Lender plus (y) the average daily amount of
Letter of Credit Obligations held by such Lender, plus (z) in the case of the Swingline Lender, the average daily balance of all outstanding U.S.
Swingline Loans held by such Swingline Lender, in each case, during the preceding calendar month; provided , in no event shall the amount
computed pursuant to clauses (i) and (ii) be less than zero,
(iii) multiplied by the Applicable Unused Line Fee Rate.
The total fee paid by the Borrowers will be equal to the sum of all of the fees due to the Lenders, subject to Section 1.11(e)(vi) . Such fee shall
be payable monthly in arrears on the first day of each calendar month following the date hereof. The Unused Commitment Fee provided in this
Section 1.9(b) shall accrue at all times from and after the execution and delivery of this Agreement. For purposes of this Section 1.9(b) , the
Revolving Loan Commitment of any Non-Funding Lender shall be deemed to be zero.
Notwithstanding anything to the contrary in this Agreement, no Canadian Borrower or Canadian Subsidiary of Holdings shall be responsible
for any fees in excess of their pro rata portion of such fees, based on the ratio of the Canadian Revolving Loan Sublimit to the Aggregate
Revolving Loan Commitment.
(c) Letter of Credit Fee . The U.S. Borrowers (with respect to U.S. Letters of Credit) and the Canadian Borrower (with respect to
Canadian Letters of Credit) agree to pay to Agent for the ratable benefit of the Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) without duplication of costs and expenses otherwise payable to Agent or Lenders hereunder or fees
otherwise paid by the Borrowers, all reasonable costs and expenses incurred by Agent or any Lender on account of such Letter of Credit
Obligations, and (ii) for each calendar month during which any Letter of Credit Obligation shall remain outstanding, a fee (the “ Letter of
Credit Fee ”) in an amount equal to the product of the daily undrawn face amount of all Letters of Credit Issued, guarantied or supported by
risk participation agreements multiplied by a per annum rate equal to the Applicable Margin with respect to Revolving Loans which are LIBOR
Rate Loans or BA Rate Loans, as applicable; provided , however , at the Required Lenders’ option, while an Event of Default exists (or
automatically while an Event of Default under Section 7.1(a) , 7.1(f) or 7.1(g) exists), such rate shall, subject to the Interest Act (Canada), be
increased by two percent (2.00%) per annum. Such fee shall be paid to Agent for the benefit of the Lenders in arrears, on the first day of each
calendar month and on the date on which all L/C Reimbursement Obligations have been discharged. In addition, the Applicable Borrower shall
pay to Agent, any L/C Issuer or any prospective L/C Issuer, as appropriate, on demand, such L/C Issuer’s or prospective L/C Issuer’s
customary fees at then prevailing rates, without duplication of fees otherwise payable hereunder (including all per annum fees), charges and
expenses of such L/C Issuer or prospective L/C Issuer in respect of the application for, and the Issuance, negotiation, acceptance, amendment,
transfer and payment of, each Letter of Credit or otherwise payable pursuant to the application and related documentation under which such
Letter of Credit is Issued.
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1.10 Payments by the Borrowers .
(a) All payments (including prepayments) to be made by each Credit Party on account of principal, interest, fees and other amounts
required hereunder shall be made without set-off, recoupment, counterclaim or deduction of any kind, shall, except as otherwise expressly
provided herein, be made to Agent (for the ratable account of the Persons entitled thereto) at the address for payment specified in the signature
page hereof in relation to Agent (or such other address as Agent may from time to time specify in accordance with Section 9.2 ), including
payments utilizing the ACH system, and shall be made in Dollars with respect to U.S. Obligations or Dollars or Canadian Dollars, as
applicable, with respect to Canadian Obligations and by wire transfer or ACH transfer in immediately available funds (which shall be the
exclusive means of payment hereunder), no later than 1:00 p.m. on the date due. Any payment which is received by Agent later than 1:00 p.m.
may in Agent’s discretion be deemed to have been received on the immediately succeeding Business Day and any applicable interest or fee
shall continue to accrue. Each Borrower and each other Credit Party hereby irrevocably waives the right to direct the application during the
continuance of an Event of Default of any and all payments in respect of any Obligation and any proceeds of Collateral. Each Borrower hereby
authorizes Agent and each Lender to make a Revolving Loan (which shall be a Base Rate Loan (if denominated in Dollars) or Canadian Index
Rate Loan (if denominated in Canadian Dollars), and which may be a U.S. Swingline Loan) to pay (i) interest, principal (including U.S.
Swingline Loans), L/C Reimbursement Obligations, agent fees, Unused Commitment Fees and Letter of Credit Fees, in each instance, on the
date due, or (ii) after five (5) days’ prior notice to the Borrower Representative, other fees, costs or expenses payable by any Borrower or any
of its Subsidiaries hereunder or under the other Loan Documents.
(b) Subject to the provisions set forth in the definition of “Interest Period” herein, if any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment (including, if applicable, any interest or fees) shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the computation, and if applicable, payment, of interest or fees, as the case
may be.
(c) During the continuance of an Event of Default, Agent may, and shall upon the direction of Required Lenders, apply any and all
payments received by Agent in respect of any Obligation in accordance with clauses first through sixth below. Notwithstanding any provision
herein to the contrary (but subject to Section 1.10(d) below), all payments made by Credit Parties to Agent after any or all of the Obligations
have been accelerated (so long as such acceleration has not been rescinded), including proceeds of Collateral (subject to the provisions of the
Intercreditor Agreement), shall be applied as follows:
first , to the payment of any Overadvance and to the payment of fees, costs and expenses, including Attorney Costs, of Agent
payable or reimbursable by the Credit Parties under the Loan Documents;
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second , to payment of Attorney Costs of Lenders payable or reimbursable by the Borrowers under this Agreement;
third , to payment of all accrued unpaid interest on the Obligations and fees owed to Agent, Lenders and L/C Issuers;
fourth , to payment of principal of the Obligations including, L/C Reimbursement Obligations then due and payable, any
Obligations under any Secured Rate Contract and cash collateralization of unmatured L/C Reimbursement Obligations to the extent not
then due and payable (but excluding Bank Product Obligations);
fifth , to payment of any other amounts owing constituting Obligations (including Bank Product Obligations); and
sixth , any remainder shall be for the account of and paid to whoever may be lawfully entitled thereto.
In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to the
application to the next succeeding category, (ii) each of the Lenders or other Persons entitled to payment shall receive an amount equal to its
pro rata share of amounts available to be applied pursuant to clauses third, fourth and fifth above and (iii) no payments by a Guarantor and no
proceeds of Collateral of a Guarantor shall be applied to Excluded Rate Contract Obligations of such Guarantor.
(d) Notwithstanding the foregoing provisions of Sections 1.10(a) and (c) , and subject to the provisions of the Intercreditor
Agreement, (i) payments from the U.S. Borrowers and proceeds of any U.S. Collateral shall be applied to pay the U.S. Obligations in the order
set forth in Section 1.10(c) ; in the case of item first (in respect of any Overadvance), to the extent that such Overadvance is a U.S.
Overadvance; in the case of items first (in respect of any amounts other than any Overadvance) and second , to the extent of the U.S.
Borrowers’ pro rata share of such Obligations; in the case of item third , to the extent of interest and fees on the Loans and Letters of Credit
advanced to, or for the account of, the U.S. Borrowers; and in the case of item fourth to the principal and cash collateralization of Loans
advanced to the U.S. Borrowers and Letters of Credit for the U.S. Borrowers’ account, and thereafter, to the Obligations of the Canadian
Borrower in the order set forth above and (ii) payments from the Canadian Borrower and proceeds of any Canadian Collateral shall be applied
to pay the Canadian Obligations in the order set forth in Section 1.10(c) ; in the case of item first (in respect of any Overadvance), to the extent
that such Overadvance is a Canadian Overadvance; in the case of items first (in respect of any amounts other than any Overadvance) and
second , to the extent of the Canadian Borrower’s pro rata share of such Obligations; in the case of item third , to the extent of interest and fees
on the Loans and Letters of Credit advanced to, or for the account of, the Canadian Borrower; and in the case of item fourth to the principal and
cash collateralization of Loans advanced to the Canadian Borrower and Letters of Credit for the Canadian Borrower’s account; provided , that
in no event shall payments from the Canadian Borrower or proceeds of any Canadian Collateral be applied to pay the U.S. Obligations.
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(e) Without limiting Section 9.26 , if Agent receives any payment of an Obligation from or on behalf of a Credit Party in any
currency other than the currency in which such Obligation is denominated, Agent may convert the payment (including the proceeds of
realization upon any Collateral) into the currency in which such Obligation is denominated at the rate of exchange (as such term is defined in
Section 9.26 ).
1.11 Payments by the Lenders to Agent; Settlement .
(a) Agent may, on behalf of Lenders, disburse funds to the Applicable Borrower for Loans requested. Each Lender shall reimburse
Agent on demand for all funds disbursed on its behalf by Agent, or if Agent so requests, each Lender will remit to Agent its Commitment
Percentage of any Loan before Agent disburses same to the Applicable Borrower. If Agent elects to require that each Lender make funds
available to Agent prior to disbursement by Agent to the Applicable Borrower, Agent shall advise each Lender by telephone or fax of the
amount of such Lender’s Commitment Percentage of the Loan requested by the Borrower Representative no later than the Business Day prior
to (or, in the case of same day Borrowings, on) the scheduled Borrowing date applicable thereto, and each such Lender shall pay Agent such
Lender’s Commitment Percentage of such requested Loan, in same day funds, by wire transfer to Agent’s account, as set forth on Agent’s
signature page hereto, no later than 1:00 p.m. on such scheduled Borrowing date. Nothing in this Section 1.11(a) or elsewhere in this
Agreement or the other Loan Documents, including the remaining provisions of Section 1.11 , shall be deemed to require Agent to advance
funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that
Agent, any Lender or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.
(b) At least once each calendar week or more frequently at Agent’s election (each, a “ Settlement Date ”), Agent shall advise each
Lender by telephone or fax of the amount of such Lender’s Commitment Percentage of principal, interest and Fees paid for the benefit of
Lenders with respect to each applicable Loan. Agent shall pay to each Lender such Lender’s Commitment Percentage (except as otherwise
provided in Section 1.1(b)(vi) , Section 1.11(e) and Section 9.9(g) ) of principal, interest and fees paid by the Borrowers since the previous
Settlement Date for the benefit of such Lender on the Loans held by it. Such payments shall be made by wire transfer to such Lender not later
than 2:00 p.m. on the next Business Day following each Settlement Date.
(c) Availability of Lender’s Commitment Percentage . Agent may assume that each Lender will make its Commitment Percentage
of each Revolving Loan available to Agent on each Borrowing date. If such Commitment Percentage is not, in fact, paid to Agent by such
Lender when due, Agent will be entitled to recover such amount on demand from such Lender without setoff, counterclaim or deduction of any
kind. If any Lender fails to pay the amount of its Commitment Percentage forthwith upon Agent’s demand, Agent shall promptly notify the
Borrower Representative and the
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Applicable Borrower shall immediately repay such amount to Agent. Nothing in this Section 1.11(c) shall be deemed to require Agent to
advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that the Borrowers may have against any Lender as a result of any default by such Lender hereunder. Without limiting the provisions of
Section 1.11(b) , to the extent that Agent advances funds to the Borrowers on behalf of any Lender and is not reimbursed therefor on the same
Business Day as such advance is made, Agent shall be entitled to retain for its account all interest accrued on such advance from the date such
advance was made until reimbursed by the applicable Lender.
(d) Return of Payments .
(i) If Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or
will be received by Agent from the Borrowers and such related payment is not received by Agent, then Agent will be entitled to recover such
amount from such Lender on demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by Agent under this Agreement or any other Loan Document
must be returned to any Credit Party or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan Document, Agent will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount that Agent has distributed to such Lender, together with
interest at such rate, if any, as Agent is required to pay to any Borrower or such other Person, without setoff, counterclaim or deduction of any
kind, and Agent will be entitled to set-off against future distributions to such Lender any such amounts (with interest) that are not repaid on
demand.
(e) Non-Funding Lenders; Procedures .
(i) Responsibility . The failure of any Non-Funding Lender to make any Revolving Loan, Letter of Credit Obligation or any
payment required by it, or to make any payment required by it under any Loan Document, or to fund any purchase of any participation to be
made or funded by it (including, with respect to any U.S. Swingline Loan) on the date specified therefor shall not relieve any other Lender
(each such other Lender, an “ Other Lender ”) of its obligations to make such loan, fund the purchase of any such participation, or make any
other such required payment on such date, and neither Agent nor, other than as expressly set forth herein, any Other Lender shall be responsible
for the failure of any Non-Funding Lender to make a loan, fund the purchase of a participation or make any other required payment under any
Loan Document.
(ii) Reallocation . If any Lender is a Non-Funding Lender, all or a portion of such Non-Funding Lender’s Letter of Credit
Obligations (unless such Lender is the L/C Issuer that Issued such Letter of Credit) and reimbursement obligations with respect to U.S.
Swingline Loans shall, at Agent’s election at any time or upon any
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L/C Issuer’s or Swingline Lender’s, as applicable, written request delivered to Agent (whether before or after the occurrence of any Default or
Event of Default), be reallocated to and assumed by the Lenders that are not Non-Funding Lenders or Impacted Lenders pro rata in accordance
with their Commitment Percentages of the Aggregate Revolving Loan Commitment (calculated as if the Non-Funding Lender’s Commitment
Percentage was reduced to zero and each other Lender’s (other than any other Non-Funding Lender’s or Impacted Lender’s) Commitment
Percentage had been increased proportionately), provided that no Lender shall be reallocated any such amounts or be required to fund any
amounts that would cause the sum of its outstanding Revolving Loans, outstanding Letter of Credit Obligations, amounts of its participations in
U.S. Swingline Loans and its pro rata share of unparticipated amounts in U.S. Swingline Loans to exceed its Revolving Loan Commitment.
(iii) Voting Rights . Notwithstanding anything set forth herein to the contrary, including Section 9.1 , a Non-Funding Lender
shall not have any voting or consent rights under or with respect to any Loan Document or constitute a “Lender” (or be, or have its Loans and
Commitments, included in the determination of “ “Required Lenders” or “Lenders directly affected” pursuant to Section 9.1 ) for any voting or
consent rights under or with respect to any Loan Document, provided that (A) the Commitment of a Non-Funding Lender may not be
increased, extended or reinstated, (B) the principal of a Non-Funding Lender’s Loans may not be reduced or forgiven, and (C) the interest rate
applicable to Obligations owing to a Non-Funding Lender may not be reduced in such a manner that by its terms affects such Non-Funding
Lender more adversely than other Lenders, in each case without the consent of such Non-Funding Lender. Moreover, for the purposes of
determining the Required Lenders, the Loans, Letter of Credit Obligations, and Commitments held by Non-Funding Lenders shall be excluded
from the total Loans and Commitments outstanding.
(iv) Borrower Payments to a Non-Funding Lender . Agent shall be authorized to use all payments received by Agent for the
benefit of any Non-Funding Lender pursuant to this Agreement to pay in full the Aggregate Excess Funding Amount to the appropriate Secured
Parties. Following such payment in full of the Aggregate Excess Funding Amount, Agent shall be entitled to hold such funds as cash collateral
in a non-interest bearing account up to an amount equal to such Non-Funding Lender’s unfunded Revolving Loan Commitment and to use such
amount to pay such Non-Funding Lender’s funding obligations hereunder until the Obligations are paid in full in cash, all Letter of Credit
Obligations have been discharged or cash collateralized and all Commitments have been terminated. Upon any such unfunded obligations
owing by a Non-Funding Lender becoming due and payable, Agent shall be authorized to use such cash collateral to make such payment on
behalf of such Non-Funding Lender. With respect to such Non-Funding Lender’s failure to fund Revolving Loans or purchase participations in
Letters of Credit or Letter of Credit Obligations, any amounts applied by Agent to satisfy such funding shortfalls shall be deemed to constitute
a Revolving Loan or amount of the participation required to be funded and, if necessary to effectuate the foregoing, the other Lenders shall be
deemed to have sold, and such Non-Funding Lender shall be deemed to have purchased, Revolving Loans or Letter of Credit participation
interests from the other Lenders until such time as the aggregate amount of the Revolving
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Loans and participations in Letters of Credit and Letter of Credit Obligations are held by the Lenders in accordance with their Commitment
Percentages of the Aggregate Revolving Loan Commitment. Any amounts owing by a Non-Funding Lender to Agent which are not paid when
due shall accrue interest at the interest rate applicable during such period to Revolving Loans that are Base Rate Loans if denominated in
Dollars and Canadian Index Rate Loans if denominated in Canadian Dollars. In the event that Agent is holding cash collateral of a
Non-Funding Lender that cures pursuant to clause (v) below or ceases to be a Non-Funding Lender pursuant to the definition of Non-Funding
Lender, Agent shall return the unused portion of such cash collateral to such Lender. The “ Aggregate Excess Funding Amount ” of a
Non-Funding Lender shall be the aggregate amount of (A) all unpaid obligations owing by such Lender to Agent, L/C Issuers, Swingline
Lender, and other Lenders under the Loan Documents, including such Lender’s pro rata share of all Revolving Loans, Letter of Credit
Obligations and U.S. Swingline Loans, plus, without duplication, (B) all amounts of such Non-Funding Lender’s Letter of Credit Obligations
and reimbursement obligations with respect to U.S. Swingline Loans reallocated to other Lenders pursuant to Section 1.11(e)(ii) .
(v) Cure . A Lender may cure its status as a Non-Funding Lender under clause (a) of the definition of Non-Funding Lender if
such Lender (A) fully pays to Agent, on behalf of the applicable Secured Parties, the Aggregate Excess Funding Amount, plus all interest due
thereon and (B) timely funds the next Revolving Loan required to be funded by such Lender or makes the next reimbursement required to be
made by such Lender. Any such cure shall not relieve any Lender from liability for breaching its contractual obligations hereunder.
(vi) Fees . A Lender that is a Non-Funding Lender pursuant to clause (a) of the definition of Non-Funding Lender shall not
earn and shall not be entitled to receive, and the Borrowers shall not be required to pay, such Lender’s portion of the Unused Commitment Fee
during the time such Lender is a Non-Funding Lender pursuant to clause (a) thereof. In the event that any reallocation of Letter of Credit
Obligations occurs pursuant to Section 1.11(e)(ii) , during the period of time that such reallocation remains in effect, the Letter of Credit Fee
payable with respect to such reallocated portion shall be payable to (A) all Lenders based on their pro rata share of such reallocation or (B) to
the L/C Issuer for any remaining portion not reallocated to any other Lenders.
(f) Procedures . Agent is hereby authorized by each Credit Party and each other Secured Party to establish procedures (and to amend
such procedures from time to time) to facilitate administration and servicing of the Loans and other matters incidental thereto. Without limiting
the generality of the foregoing, Agent is hereby authorized to establish procedures to make available or deliver, or to accept, notices,
documents and similar items on, by posting to or submitting and/or completion on, E-Systems.
1.12 Borrower Representative . Real Alloy Recycling hereby (i) is designated and appointed by each Borrower as its representative and
agent on its behalf (the “ Borrower Representative ”) and (ii) accepts such appointment as the Borrower Representative, in each case, for the
purposes of issuing Notices of Borrowings, Notices
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of Conversion/Continuation, L/C Requests and U.S. Swingline Requests, delivering certificates including Compliance Certificates, Applicable
Margin Certificates and Borrowing Base Certificates, giving instructions with respect to the disbursement of the proceeds of the Loans,
selecting interest rate options, giving and receiving all other notices and consents hereunder or under any of the other Loan Documents and
taking all other actions (including in respect of compliance with covenants) on behalf of any Borrower, the Borrowers, any Credit Party or the
Credit Parties under the Loan Documents. Agent and each Lender may regard any notice or other communication pursuant to any Loan
Document from the Borrower Representative as a notice or communication from all Credit Parties. Each warranty, covenant, agreement and
undertaking made on behalf of a Credit Party by the Borrower Representative shall be deemed for all purposes to have been made by such
Credit Party and shall be binding upon and enforceable against such Credit Party to the same extent as if the same had been made directly by
such Credit Party.
1.13 Eligible Accounts . All of the Accounts owned by each Borrower and properly reflected as “Eligible Accounts” in the most recent
Borrowing Base Certificate delivered by Borrower Representative to Agent shall be “Eligible Accounts” for purposes of this Agreement,
except any Account to which any of the exclusionary criteria set forth below applies. Agent (a) shall have the right to establish, modify or
eliminate Reserves against Eligible Accounts from time to time in its Permitted Discretion and (b) reserves the right, at any time and from time
to time after the Closing Date, to adjust any of the applicable criteria and to establish new criteria, in its Permitted Discretion, subject to the
approval of Required Lenders in the case of adjustments or new criteria which have the effect of making more credit available; provided that
Agent shall provide the Borrower Representative five (5) days prior written notice before making such modifications or adjustments with
respect to Reserves or eligibility criteria, as applicable; provided further that notwithstanding the foregoing, no such notice shall be required if
(i) Exigent Circumstances exist and are continuing or (ii) if, after giving effect to such modification or adjustment, Availability is less than the
greater of $16,500,000 and 15% of the Aggregate Revolving Loan Commitment. Eligible Accounts shall not include the following Accounts of
a Borrower:
(a) Accounts – Past Due/Extended Terms . (i) Accounts that are not paid within the earlier of sixty (60) days following its due date
or one hundred twenty (120) days following its original invoice date and (ii) Accounts that specify a due date more than ninety (90) days after
original invoice date;
(b) Cross Aged Accounts . Accounts that are the obligations of an Account Debtor if fifty percent (50%) or more of the Dollar
amount of all Accounts owing by that Account Debtor are ineligible for inclusion in the U.S. Borrowing Base (if such Borrower is a U.S.
Borrower) or the Canadian Borrowing Base (if such Borrower is the Canadian Borrower) under the other criteria set forth in this Section 1.13 ;
(c) Foreign Accounts . Accounts that are the obligations of an Account Debtor located in a country other than the United States or
Canada unless (i) payment thereof is assured by a letter of credit assigned and delivered to Agent, satisfactory to
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Agent as to form, amount and Issuer, (ii) payment is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory
to Agent or (iii) such Account Debtor is a foreign Affiliate of an Account Debtor organized under the laws of a state in the United States or the
District of Columbia whose senior unsecured debt is rated “BBB-” or better by Standard & Poor’s Ratings Group and “Baa3” or better by
Moody’s Investors Service, Inc.; provided that, in no event, shall the amount of Eligible Accounts as a result of the foregoing clauses (ii) and
(iii) exceed $2,000,000 in the aggregate at any one time;
(d) Government Accounts . Accounts that are the obligation of an Account Debtor that is the United States government or a political
subdivision thereof, or any state, county or municipality or department, agency or instrumentality thereof or the Canadian government (Her
Majesty The Queen in Right of Canada) or a political subdivision thereof, or any province or territory, or any municipality or department,
agency or instrumentality thereof, unless Agent, in its sole discretion, has agreed to the contrary in writing, or the applicable Borrower has
complied with respect to such obligation with the Federal Assignment of Claims Act of 1940 or the Financial Administration Act (Canada), or
any applicable state, county or municipal law restricting the assignment thereof with respect to such obligation;
(e) Contra Accounts . Accounts to the extent a Borrower or any Subsidiary thereof is liable for goods sold or services rendered by
the applicable Account Debtor to such Borrower or any Subsidiary thereof but only to the extent of the potential offset;
(f) Chargebacks/Partial Payments/Disputed . Any Account to the extent that any defense, counterclaim, setoff or dispute is asserted
as to such Account;
(g) Inter-Company/Affiliate Accounts . Accounts that arise from a sale to any employee or Affiliate of any Credit Party;
(h) Concentration Risk . Accounts to the extent that such Account, together with all other Accounts owing by such Account Debtor
and its Affiliates to one or more Borrowers as of any date of determination exceed, (i) in the case of each of General Motors Corp. and Honda
Motor Co., in each case together with its Affiliates, twenty-five percent (25%) of all Eligible Accounts, and, in the case of Chrysler Group,
LLC, together with its Affiliates, thirty percent (30%) of all Eligible Accounts (each of the foregoing, a “ Concentration Exception Cap ”, as
may be reduced from time to time pursuant to clause (B) below); provided that (A) in no event, shall the Accounts of Chrysler Group, LLC,
General Motors Corp. and Honda Motor Co., together with their Affiliates, in the aggregate exceed sixty-five percent (65%) of all Eligible
Accounts and (B) Agent may, with respect to such Accounts, reduce the Concentration Exception Cap applicable to each of Chrysler Group,
LLC, General Motors Corp. and Honda Motor Co., in each case together with their Affiliates, if there has occurred a deterioration in the credit
quality of such Account Debtor, as determined by Agent, or as otherwise deemed necessary by Agent in its Permitted Discretion, or (ii) in all
other cases, fifteen percent (15%) of all Eligible Accounts;
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(i) Credit Risk . Accounts that are otherwise determined to be unacceptable by Agent in its Permitted Discretion, upon the delivery
of prior or contemporaneous notice (oral or written) of such determination to the Borrower Representative;
(j) Unbilled . Accounts with respect to which an invoice, reasonably acceptable to Agent in form and substance, has not been sent to
the applicable Account Debtor;
(k) Defaulted Accounts; Bankruptcy . Accounts where:
(i) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(ii) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(l) Progress Billing . Accounts (i) as to which such Borrower is not able to bring suit or otherwise enforce its remedies against the
Account Debtor through judicial process, or (ii) if the Account represents a progress billing consisting of an invoice for goods sold or used or
services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to such Borrower’s
completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;
(m) Bill and Hold . Accounts that arise with respect to goods that are sold on a bill-and-hold basis;
(n) C.O.D . Accounts that arise with respect to goods that are sold on a cash-on-delivery basis;
(o) Non-Acceptable Alternative Currency . Accounts that are payable in any currency other than United States Dollars or Canadian
Dollars;
(p) Other Liens Against Receivables . Accounts that (i) are not owned by such Borrower or (ii) are subject to any right, claim, Lien
or other interest of any other Person, other than (x) Liens in favor of Agent, securing the Obligations and (y) Liens in favor of the Notes
Collateral Trustee that are permitted pursuant to Section 5.1(p) ;
(q) Conditional Sale . Accounts that arise with respect to goods that are placed on consignment, guarantied sale or other terms by
reason of which the payment by the Account Debtor is conditional;
(r) Judgments, Notes or Chattel Paper . Accounts that are evidenced by a judgment, Instrument or Chattel Paper;
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(s) Not Bona Fide . Accounts that are not true and correct statements of bona fide indebtedness incurred in the amount of such
Account for merchandise sold to or services rendered and accepted by the applicable Account Debtor;
(t) Ordinary Course; Sales of Equipment or Bulk Sales . Accounts that do not arise from the sale of goods or the performance of
services by such Borrower in the Ordinary Course of Business, including, sales of Equipment and bulk sales;
(u) Not Perfected . Accounts as to which Agent’s Lien thereon, on behalf of itself and the other Secured Parties, is not a first
priority perfected Lien;
(v) Factoring Arrangements . Accounts that are the obligations of an Account Debtor with respect to which any such Accounts are
subject to a Permitted Supplier Financing Arrangement; or
(w) Notes Priority Collateral . Accounts that arise out of a sale or other disposition of any Property that constitutes Notes Priority
Collateral.
1.14 Eligible Inventory . All of the Inventory owned by each Borrower and properly reflected as “Eligible Inventory” in the most recent
Borrowing Base Certificate delivered by Borrower Representative to Agent shall be “Eligible Inventory” for purposes of this Agreement,
except any Inventory to which any of the exclusionary criteria set forth below or in the component definitions herein applies. Agent (a) shall
have the right to establish, modify, or eliminate Reserves against Eligible Inventory from time to time in its Permitted Discretion and
(b) reserves the right, at any time and from time to time after the Closing Date, to adjust any of the applicable criteria and to establish new
criteria, in its Permitted Discretion, subject to the approval of Required Lenders in the case of adjustments or new criteria which have the effect
of making more credit available; provided that Agent shall provide the Borrower Representative five (5) days prior written notice before
making such modifications or adjustments with respect to Reserves or eligibility criteria, as applicable; provided further that notwithstanding
the foregoing, no such notice shall be required if (i) Exigent Circumstances exist and are continuing or (ii) if, after giving effect to such
modification or adjustment, Availability is less than the greater of $16,500,000 and 15% of the Aggregate Revolving Loan Commitment.
Eligible Inventory shall not include the following Inventory of a Borrower:
(a) Excess/Obsolete . Inventory that is damaged and unfit for sale or excess, obsolete, unsalable, shopworn, or seconds;
(b) Locations < $75M . Inventory that is located at any site where the aggregate book value of Inventory at such location is less than
$75,000;
(c) Consignment . Inventory that is placed on consignment;
(d) Off-Site . Inventory that (i) is not located on premises owned, leased or rented by a Credit Party and set forth in Schedule 3.21 or
(ii) is stored at a leased location, unless (x) a reasonably satisfactory landlord waiver has been delivered to Agent and such Inventory is
segregated or otherwise separately identifiable from goods
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of others, if any, stored on such leased premises, or (y) Reserves reasonably satisfactory to Agent have been established with respect thereto,
(iii) is stored with a bailee or warehouseman unless (x) a reasonably satisfactory, acknowledged bailee letter has been received by Agent with
respect thereto and such Inventory is segregated or otherwise separately identifiable from goods of others, if any, stored on such leased
premises and (y) Reserves reasonably satisfactory to Agent have been established with respect thereto, or (iv) is located at an owned location
subject to a mortgage in favor of a lender other than Agent or the Notes Collateral Trustee to the extent permitted pursuant to Section 5.1(p) ,
unless a reasonably satisfactory mortgagee waiver has been delivered to Agent;
(e) In-Transit . Inventory that is in transit, except for Inventory in transit between U.S. and/or Canadian locations of the Borrowers
as to which Agent’s Liens have been perfected at origin and destination; provided , that any such Inventory en route from any such U.S.
location shall be included in the U.S. Borrowing Base and any such Inventory en route from any such Canadian location shall be included in
the Canadian Borrowing Base;
(f) Customized . Inventory subject to any licensing, trademark, trade name or copyright agreements with any third parties which
would require any consent of any third party for the sale or disposition of that Inventory (which consent has not been obtained) or the payment
of any monies to any third party upon such sale or other disposition (to the extent of such monies);
(g) Packing/Shipping Materials . Inventory that consists of packing or shipping materials, or manufacturing supplies;
(h) Tooling . Inventory that consists of tooling or replacement parts;
(i) Display . Inventory that consists of display items;
(j) Returns . Inventory that consists of goods which have been returned by the buyer and are unsalable;
(k) Freight . Inventory that consists of any costs associated with “freight-in” charges in excess of normal and customary freight;
(l) Hazardous Materials . Inventory that consists of Hazardous Materials or goods that can be transported or sold only with licenses
that are not readily available;
(m) Un-insured . Inventory that is not covered by casualty insurance in compliance with Section 4.6 of this Agreement;
(n) Not Owned/Other Liens . Inventory that is not owned by such Borrower or is subject to Liens other than Permitted Liens
described in Sections 5.1(b) , (c) , (d) , (f) and (p) or rights of any other Person (including the rights of a purchaser that has made progress
payments and the rights of a surety that has issued a bond to assure such Borrower’s performance with respect to that Inventory and the rights
of suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada));
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(o) Unperfected . Inventory that is not subject to a first priority Lien in favor of Agent on behalf of itself and the Secured Parties,
except for Liens described in Section 5.1(d) (subject to Reserves);
(p) Negotiable Bill of Sale . Inventory that is covered by a negotiable document of title, unless such document has been delivered to
Agent with all necessary endorsements, free and clear of all Liens except Liens in favor of Agent, on behalf of itself and the Secured Parties;
(q) Not Ordinary Course . Inventory (other than raw materials and work-in-progress) that is not of a type held for sale in the
Ordinary Course of Business of a Credit Party; or
(r) Other Inventory . Inventory Agent otherwise deems to be ineligible in its Permitted Discretion.
ARTICLE II.
CONDITIONS PRECEDENT
2.1 Conditions of Initial Loans . The obligation of each Lender to make its initial Loans and of each L/C Issuer to Issue, or cause to be
Issued, the initial Letters of Credit hereunder is subject to satisfaction of the following conditions in a manner satisfactory to Agent:
(a) Loan Documents . Agent shall have received on or before the Closing Date all of the agreements, documents, instruments and
other items set forth on the closing checklist attached hereto as Exhibit 2.1 , each in form and substance reasonably satisfactory to Agent;
(b) Minimum Liquidity . After giving effect to the consummation of all Related Transactions on the Closing Date, including the
payment of any deferred purchase price in connection with the Closing Date Acquisition, Borrowers shall have minimum liquidity of at least
(i) $23,500,000, consisting of Excess Availability and unrestricted cash and Cash Equivalents (but excluding amounts available under the
Factoring Facility) and (ii) $45,000,000, consisting of Excess Availability and unrestricted cash and Cash Equivalents (including amounts
available under the Factoring Facility);
(c) Related Transactions . The Related Transactions (other than the making of the initial Revolving Loans and the Issuance of the
initial Letters of Credit) shall have closed in the manner contemplated by the Related Agreements. Agent shall have received evidence that Real
Alloy Acquisition has received (i) not less than $175,000,000 (less the amount, if any, of up to $60,000,000 of preferred Stock of the Sponsor
issued to Aleris Corporation, (x) as a portion of the consideration of the Acquired Business and (y) pursuant to that certain backstop
commitment made by Aleris
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Corporation to backstop the purchase of up to $30,000,000 of the Sponsor’s equity in connection with the Purchase Agreement) in cash
proceeds (and in no event less than 30% of the total pro forma capitalization of Real Alloy Acquisition after consummation of the Closing Date
Acquisition (including in such calculation up to $60,000,000 of preferred Stock of the Sponsor issued to Aleris Corporation as if it were issued
by the Sponsor for cash and contributed in cash to Real Alloy Acquisition in the form of common equity capital of Real Alloy Acquisition))
from the Closing Date Equity Transaction and (ii) not less than $296,514,900 in gross cash proceeds in the aggregate from the issuance of the
Bonds;
(d) Intercreditor Agreement . Agent and the Lenders shall have agreed to satisfactory intercreditor arrangements with the Notes
Collateral Trustee, and Agent shall have received a fully executed Intercreditor Agreement, in form and substance satisfactory to Agent and the
Lenders, and such Intercreditor Agreement shall be in full force and effect;
(e) Release from Prior Lender Obligations; Release of Liens in Favor of Prior Lender . Agent shall have received evidence in form
and substance reasonably satisfactory to it confirming (i) that the Credit Parties shall be released from any and all obligations owing to Prior
Lender in connection with the Prior Indebtedness and (ii) any and all Liens upon any of the Property of the Credit Parties or any of their
Subsidiaries in favor of Prior Lender shall have been terminated by Prior Lender on or prior to the Closing Date;
(f) Payment of Fees . The Borrowers shall have paid the fees required to be paid on the Closing Date in the respective amounts
specified in Section 1.9 (including the fees specified in the Fee Letter), and shall have reimbursed Agent for all fees, costs and expenses of
closing presented as of the Closing Date (in the case of expenses, to the extent invoiced in summary form at least three (3) calendar days prior
to the Closing Date (except as otherwise agreed by the Borrower Representative));
(g) Solvency Certificate . Agent shall have received a solvency certificate executed by the chief financial officer of the Borrower
Representative certifying that both before and after giving effect to (i) the Loans made and Letters of Credit Issued on the Closing Date, (ii) the
disbursement of the proceeds of such Loans to or as directed by the Borrower Representative, (iii) the incurrence of all other Indebtedness on
the Closing Date, including the Indebtedness under the Indenture Documents, (iv) the consummation of the other Related Transactions, and
(v) the payment and accrual of all transaction costs in connection with the foregoing, the Credit Parties taken as a whole are Solvent;
(h) Closing Date Material Adverse Effect . (i) Since December 31, 2013 through the date of the Purchase Agreement, there has not
occurred any Effect (as defined in the Purchase Agreement) which has had or would be reasonably expected to have, individually or in the
aggregate, a Closing Date Material Adverse Effect and (ii) no Effect (as defined in the Purchase Agreement) has occurred since the date of the
Purchase Agreement that has had, or would reasonably be expected to have, individually or in the aggregate, a Closing Date Material Adverse
Effect;
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(i) Collateral Audit . Agent shall have received a collateral audit, in form and substance satisfactory to Agent;
(j) Patriot Act . Agent shall have received all documentation and other information required by bank regulatory authorities under
applicable “know-your-customer” and anti-money laundering rules and regulations, including the Patriot Act and Canadian AML Legislation,
at least ten (10) days prior to the Closing Date;
(k) Representations and Warranties . (i) The representations and warranties of the Borrowers and the other Credit Parties contained
in (x) Sections 3.1(a) , 3.1(b) (solely as it relates to the Loan Documents), 3.2 (solely as it relates to the Loan Documents), 3.3 (solely as it
relates to the Loan Documents), 3.4 (solely as it relates to the Loan Documents), 3.5 (solely as it relates to the Loan Documents), 3.8 , 3.11(a) ,
3.11(b) , 3.11(e) , 3.13 , 3.14 , 3.30 and 3.31 of this Agreement and (y) Section 4.2 of each Guaranty and Security Agreement shall be true and
correct in all material respects (without duplication of any materiality qualifier contained therein) and (ii) the Purchase Agreement
Representations shall be true and correct in all material respects (without duplication of any materiality qualifier contained therein); and
(l) Collateral; Priority of Liens . Agent shall have received on or before the Closing Date all of the Collateral Documents set forth
on the closing checklist attached hereto as Exhibit 2.1 , each in form and substance reasonably satisfactory to Agent; provided , however, that
the requirements set forth in this clause (l) (except for the execution and delivery of each Guaranty and Security Agreement and to the extent
that a Lien on the Collateral may be perfected by the (x) filing of a financing statement under the UCC or PPSA, as applicable, (y) the making
of a federal intellectual property filing or (z) delivery to Agent or the Notes Collateral Trustee (subject to the Intercreditor Agreement) of Stock
or other certificated securities of the Borrowers, the other Credit Parties, and their Domestic Subsidiaries (other than Excluded Domestic
Subsidiaries) and Foreign Subsidiaries (other than Excluded Foreign Subsidiaries)) shall not constitute conditions precedent to the effectiveness
of this Agreement on the Closing Date after the Credit Parties’ use of commercially reasonable efforts to provide such items on or prior to the
Closing Date if the Credit Parties agree to deliver, or cause to be delivered, such documents and instruments, or take or cause to be taken such
other actions as may be required to perfect such security interests within ninety (90) calendar days after the Closing Date (or such later date as
Agent shall determine in its sole discretion) pursuant to arrangements to be mutually agreed between the Credit Parties and Agent.
2.2 Conditions to All Borrowings . Except as otherwise expressly provided herein, no Lender or L/C Issuer shall be obligated to fund any
Loan or incur any Letter of Credit Obligation, in each instance, after funding of the initial Loans on the Closing Date, if, as of the date thereof:
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(a) any representation or warranty by any Credit Party contained herein or in any other Loan Document is untrue or incorrect in any
material respect (without duplication of any materiality qualifier contained therein) as of such date, except to the extent that such representation
or warranty expressly relates to an earlier date (in which event such representations and warranties were untrue or incorrect in any material
respect (without duplication of any materiality qualifier contained therein), and with respect to Revolving Loans or Issuances of Letters of
Credit, Agent or Required Lenders have determined not to make such Loan or incur such Letter of Credit Obligation as a result of the fact that
such warranty or representation is untrue or incorrect;
(b) any Default or Event of Default has occurred and is continuing or would reasonably be expected to result after giving effect to
any Loan (or the incurrence of any Letter of Credit Obligation), and with respect to Revolving Loans or Issuances of Letters of Credit, Agent or
Required Lenders shall have determined not to make any Loan or incur any Letter of Credit Obligation as a result of that Default or Event of
Default; or
(c) subject to Section 1.1(a)(iii) , after giving effect to any Loan (or the incurrence of any Letter of Credit Obligations), (i) the
U.S. Dollar Equivalent of the aggregate outstanding amount of the Revolving Loans would exceed the Maximum Revolving Loan Amount,
(ii) the aggregate outstanding amount of the U.S. Revolving Loans would exceed the Maximum U.S. Revolving Loan Amount or (iii) the
U.S. Dollar Equivalent of the aggregate outstanding amount of the Canadian Revolving Loans would exceed the Maximum Canadian
Revolving Loan Amount.
The request by the Borrower Representative and acceptance by the Applicable Borrower of the proceeds of any Loan or the incurrence of any
Letter of Credit Obligations shall be deemed to constitute, as of the date thereof, (i) a representation and warranty by the Borrowers that the
conditions in this Section 2.2 have been satisfied and (ii) a reaffirmation by each Credit Party of the granting and continuance of Agent’s Liens,
on behalf of itself and the Secured Parties, pursuant to the Collateral Documents.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
The Credit Parties, jointly and severally, represent and warrant to Agent and each Lender that the following are, and after giving effect to
the Related Transactions will be, true, correct and complete:
3.1 Corporate Existence and Power . Each Credit Party and each of their respective Subsidiaries:
(a) is a corporation, unlimited liability company, limited liability company, general partnership or limited partnership, as applicable,
duly organized, validly existing and in good standing (to the extent such concept exists) under the laws of the jurisdiction of its incorporation,
organization or formation, as applicable;
(b) has the corporate or other organizational power and authority and all governmental licenses, authorizations, Permits, consents
and approvals to (i) own its assets, (ii) carry on its business and (iii) execute, deliver, and perform its obligations under, the Loan Documents
and the Related Agreements to which it is a party;
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(c) is duly qualified as a foreign corporation, extra provincial corporation, unlimited liability company, limited liability company or
limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation
of Property or the conduct of its business requires such qualification or license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (b)(i) , clause (b)(ii) , clause (c) or clause (d) , to the extent that the failure to do so would not
reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
3.2 Corporate Authorization; No Contravention . The execution, delivery and performance by each of the Credit Parties of this
Agreement, and by each Credit Party and each of their respective Subsidiaries of any other Loan Document and Related Agreement to which
such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not:
(a) contravene the terms of any of that Person’s Organization Documents;
(b) conflict with or result in any material breach or contravention of, or result in the creation of any Lien (other than Liens in favor
of Agent created under the Loan Documents) under, any document evidencing any material Contractual Obligation to which such Person is a
party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or
(c) violate any Requirement of Law in any material respect.
3.3 Governmental Authorization . No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any
Credit Party or any Subsidiary of any Credit Party of this Agreement, any other Loan Document or Related Agreement except (a) for
recordings and filings in connection with the Liens granted to Agent under the Collateral Documents, (b) those obtained or made on or prior to
the Closing Date and (c) in the case of any Related Agreement, those which, if not obtained or made, would not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
3.4 Binding Effect . This Agreement and each other Loan Document and Related Agreement to which any Credit Party or any Subsidiary
of any Credit Party is a party constitute the legal, valid and binding obligations of each such Person which is a party thereto, enforceable
against such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
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3.5 Litigation . Except as specifically disclosed on Schedule 3.5 , there are no actions, suits, proceedings, claims or disputes pending, or
to the best knowledge of each Credit Party, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority,
against any Credit Party, any Subsidiary of any Credit Party or any of their respective Properties which:
(a) purport to affect or pertain to this Agreement, any other Loan Document or Related Agreement, or any of the transactions
contemplated hereby or thereby; or
(b) would reasonably be expected to result in monetary judgment(s) or relief, individually or in the aggregate, in excess of
$3,000,000; or
(c) seek an injunction or other equitable relief which would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Related Agreement,
or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. As of the Closing Date, no
Credit Party or any Subsidiary of any Credit Party is the subject of an audit or, to each Credit Party’s knowledge, any review or investigation
by any Governmental Authority (excluding the IRS, CRA and other taxing authorities) concerning the violation or possible violation of any
Requirement of Law that could reasonably be expected to result in Liabilities, individually or in the aggregate, in excess of $1,000,000.
3.6 No Default . No Default or Event of Default exists or would result from the incurring of any Obligations by any Credit Party or the
grant or perfection of Agent’s Liens on the Collateral or the consummation of the Related Transactions. No Credit Party and no Subsidiary of
any Credit Party is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such
defaults, would reasonably be expected to have a Material Adverse Effect.
3.7 Pension Plan; ERISA Compliance .
(a) Schedule 3.7 sets forth, as of the Closing Date, a complete and correct list of, and separately identifies, (a) all Title IV Plans,
(b) all Multiemployer Plans and (c) all material Benefit Plans. Each Benefit Plan, and each trust thereunder, intended to qualify for tax exempt
status under Section 401 or 501 of the Code so qualifies. Except for those that would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect, (x) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of
Law, (y) there are no existing or pending (or to the knowledge of any Credit Party, threatened) claims (other than routine claims for benefits in
the normal course), sanctions, actions, lawsuits or other
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proceedings or investigation involving any Benefit Plan to which any Credit Party incurs or otherwise has or could have an obligation or any
Liability and (z) no ERISA Event is reasonably expected to occur. On the Closing Date, no ERISA Event has occurred in connection with
which obligations and liabilities (contingent or otherwise) remain outstanding.
(b) Schedule 3.7 sets forth, as of the Closing Date, all material Canadian Pension Plans maintained or contributed to by each Credit
Party. No Canadian Pension Plan is a Canadian Defined Benefit Pension Plan. The Canadian Pension Plans are duly registered under the
Income Tax Act (Canada) and all other applicable laws which require registration. Each Credit Party has complied with and performed all of its
obligations under and in respect of the Canadian Pension Plans under the terms thereof, any funding agreements and all applicable laws
(including any fiduciary, funding, investment and administration obligations), except to the extent it would not reasonably be expected to result
in a Material Adverse Effect. All employer and employee payments, contributions or premiums to be remitted, paid to or in respect of each
Canadian Pension Plan have been paid in a timely fashion in accordance with the terms thereof, any funding agreement and all applicable laws,
except to the extent it would not reasonably be expected to result in a Material Adverse Effect.
(c) No Credit Party and no Subsidiary of any Credit Party is or has at any time been an employer (for the purposes of Sections 38 to 51 of
the U.K. Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the U.K.
Pensions Schemes Act 1993) and (ii) no Credit Party and no Subsidiary of any Credit Party is or has at any time been “connected” with or an
“associate” of (as those terms are used in Sections 39 and 43 of the U.K. Pensions Act 2004) such an employer.
3.8 Use of Proceeds; Margin Regulations . No Credit Party and no Subsidiary of any Credit Party is engaged in the business of purchasing
or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock. Schedule 3.8 contains a description of the
Credit Parties’ sources and uses of funds on the Closing Date, including Loans and Letters of Credit made or Issued on the Closing Date and a
funds flow memorandum detailing how funds from each source are to be transferred to particular uses.
3.9 Ownership of Property; Liens . As of the Closing Date, the Real Estate listed on Schedule 3.9 constitutes all of the Real Estate of each
Credit Party and each of their respective Subsidiaries. Each of the Credit Parties and each of their respective Subsidiaries has good record and
marketable title in fee simple to, or valid leasehold interests in, all Real Estate, and good and valid title to all owned personal property and valid
leasehold interests in all leased personal property, in each instance, necessary or used in the ordinary conduct of their respective businesses,
except for defects in title that, individually or in the aggregate, do not materially interfere with its ability to conduct its business as currently
conducted and to utilize such Real Estate or such property, as applicable, for its intended purposes. As of the Closing Date, none of the Real
Estate of any Credit Party or any Subsidiary of any Credit Party is subject to any Liens other than
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Permitted Liens. As of the Closing Date, Schedule 3.9 also describes any purchase options, rights of first refusal or other similar contractual
rights pertaining to any Real Estate (in the case of leased Real Estate, solely to the extent any such purchase option, right of first refusal or
similar contractual right relates to the leasehold interest of the applicable Credit Party or Subsidiary thereof). As of the Closing Date, all
material Permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes
for which it is currently occupied and used have been lawfully issued and are in full force and effect.
3.10 Taxes . All United States federal, Canadian federal, state, foreign, provincial and local income and franchise and other material Tax
returns, reports and statements (collectively, the “ Tax Returns ”) required to be filed by any Tax Affiliate have been filed with the appropriate
Governmental Authorities, all such Tax Returns are true and correct in all material respects, and all Taxes reflected therein or otherwise due
and payable have been paid prior to the date on which any Liability may be added thereto for non-payment thereof except for (a) those
contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the
appropriate Tax Affiliate in accordance with GAAP and (b) state, foreign, provincial or other local sales, property or use tax returns and taxes
owing thereunder that, collectively, do not exceed $1,000,000 at any one time. As of the Closing Date, no Tax Return is under audit or
examination by any Governmental Authority, and no notice of any audit or examination or any assertion of any claim for Taxes has been given
or made by any Governmental Authority, except to the extent that any such audit, examination or claim could not reasonably be expected to
result in Liabilities, individually or in the aggregate, in excess of $1,000,000. Proper and accurate amounts have been withheld by each Tax
Affiliate from their respective employees for all periods in full and complete compliance with the Tax, social security and unemployment
withholding provisions of applicable Requirements of Law and such withholdings have been timely paid to the respective Governmental
Authorities. No Tax Affiliate has participated in a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b) or
has been a member of an affiliated, combined or unitary group other than the group of which a Tax Affiliate is the common parent.
3.11 Financial Condition .
(a) The unaudited interim consolidated and consolidating balance sheets of the Acquired Business dated September 30, 2014 and
the related unaudited consolidated and consolidating statements of income, shareholders’ equity and cash flows for the nine (9) fiscal months
then ended, in each case, as attached hereto as Schedule 3.11(a) :
(x) were, to the best knowledge of the Credit Parties, prepared in accordance with GAAP consistently applied throughout the
respective periods covered thereby, except as otherwise expressly noted therein, subject to normal year-end adjustments and the lack of
footnote disclosures; and
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(y) to the best knowledge of the Credit Parties, present fairly in all material respects the consolidated and consolidating
financial condition of the Acquired Business as of the dates thereof and results of operations for the periods covered thereby.
(b) The pro forma unaudited consolidating balance sheet of the Acquired Business dated September 30, 2014 delivered on or before
the Closing Date and attached hereto as Schedule 3.11(b) was, to the best knowledge of the Credit Parties, prepared by Holdings after giving
pro forma effect to the Related Transactions, was based on the unaudited consolidated and consolidating balance sheets of the Acquired
Business dated September 30, 2014, and was prepared in accordance with GAAP, with only such adjustments thereto as would be required in a
manner consistent with GAAP. Agent and the Lenders acknowledge and agree that the Acquired Business has not operated as a separate “stand
alone” entity within Seller and, as a result, the Acquired Business has been allocated certain charges and credits for purposes of the preparation
of the financial statements attached as Schedule 3.11(a) , which allocations of charges and credits do not necessarily reflect the amounts that
would have resulted from arms-length transactions or the actual costs that would be incurred if the Acquired Business operated as an
independent enterprise; provided that the Credit Parties acknowledge and agree that such charges and credits are allocated on a basis consistent
with the financial performance projections attached as Schedule 3.11(e) .
(c) Since December 31, 2013, there has been no Material Adverse Effect.
(d) The Credit Parties and their Subsidiaries have no Indebtedness other than Indebtedness permitted pursuant to Section 5.5 and
have no Contingent Obligations other than Contingent Obligations permitted pursuant to Section 5.9 .
(e) All financial performance projections delivered to Agent, including the financial performance projections delivered on the
Closing Date and attached hereto as Schedule 3.11(e) , represent the Borrowers’ good faith estimate of future financial performance and are
based on assumptions believed by the Borrowers to be fair and reasonable in light of current market conditions, it being acknowledged and
agreed by Agent and Lenders that projections as to future events are not to be viewed as facts and that the actual results during the period or
periods covered by such projections may differ from the projected results and such differences may be material.
3.12 Environmental Matters . Except as set forth on Schedule 3.12 , and except as would not reasonably be expected to result in, either
individually or in the aggregate, Material Environmental Liabilities to the Credit Parties and their Subsidiaries, (a) the operations of each Credit
Party and each Subsidiary of each Credit Party are and have been in compliance with all applicable Environmental Laws, including obtaining,
maintaining and complying with all Permits required by any applicable Environmental Law, (b) no Lien in favor of any Governmental
Authority securing, in whole or in part, Environmental Liabilities has attached to any Property of any Credit Party or any Subsidiary of any
Credit Party and, to the knowledge of any Credit Party, no facts,
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circumstances or conditions exist that could reasonably be expected to result in any such Lien attaching to any such Property, (c) no Credit
Party and no Subsidiary of any Credit Party has caused or suffered to occur a Release of Hazardous Materials at, to or from any Real Estate,
(d) all Real Estate currently (or to the knowledge of any Credit Party previously) owned, leased, subleased, operated or otherwise occupied by
or for any such Credit Party and each Subsidiary of each Credit Party is free of contamination by any Hazardous Materials, and (e) no Credit
Party and no Subsidiary of any Credit Party (i) is or has been engaged in, or has permitted any current or former tenant to engage in, operations
in violation of any Environmental Law or (ii) has received any written information request or notice of potential responsibility under the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et seq .) or similar Environmental Laws. Each
Credit Party has made available to Agent copies of all existing environmental reports, reviews and audits and all documents pertaining to actual
or potential Environmental Liabilities, in each case to the extent such reports, reviews, audits and documents are in their possession, custody,
control or otherwise available to the Credit Parties.
3.13 Regulated Entities . No Credit Party, no Person controlling any Credit Party, nor any Subsidiary of any Credit Party, is (a) an
“investment company” within the meaning of the Investment Company Act of 1940 or (b) subject to regulation under the Federal Power Act,
the Interstate Commerce Act, any state public utilities code, or any other federal, state, provincial, territorial, local or foreign statute, rule or
regulation limiting its ability to incur Indebtedness, pledge its assets or perform its obligations under the Loan Documents.
3.14 Solvency . Both before and after giving effect to (a) the Loans made and Letters of Credit Issued on or prior to the date this
representation and warranty is made or remade, (b) the disbursement of the proceeds of such Loans to or as directed by the Borrower
Representative, (c) the consummation of the Related Transactions and (d) the payment and accrual of all transaction costs in connection with
the foregoing, both the Credit Parties taken as a whole and each Borrower individually are Solvent.
3.15 Labor Relations . There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of any Credit
Party, threatened) against or involving any Credit Party or any Subsidiary of any Credit Party, except for those that would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 3.15 , as of the Closing Date, (a) there is no
collective bargaining or similar agreement with any union, labor organization, works council or similar representative covering any employee
of any Credit Party or any Subsidiary of any Credit Party, (b) no petition for certification or election of any such representative is existing or
pending with respect to any employee of any Credit Party or any Subsidiary of any Credit Party and (c) no such representative has sought
certification or recognition with respect to any employee of any Credit Party or any Subsidiary of any Credit Party.
3.16 Intellectual Property . Schedule 3.16 sets forth a true and complete list of all Intellectual Property, owned by each Credit Party, and
any and all Intellectual Property with respect to which such Credit Party has the valid right to use, and includes
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with respect thereto the following items: (1) the owner; (2) the title; (3) as applicable, the jurisdiction in which such item has been registered or
otherwise arises or in which an application for registration has been filed; (4) as applicable, the registration or application number and
registration or application date; and (5) any material inbound or outbound IP Licenses or other rights (including franchises) granted by or to
such Credit Party. Each Credit Party and each Subsidiary of each Credit Party owns, or is licensed to use, all Intellectual Property necessary to
conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse Effect. To the best knowledge of each Credit Party, (a) the conduct
and operations of the businesses of each Credit Party and each Subsidiary of each Credit Party does not infringe, misappropriate, dilute, violate
or otherwise impair any Intellectual Property owned by any other Person and (b) no other Person has notified any Credit Party or any
Subsidiary of any Credit Party that it is contesting or intends to contest any right, title or interest of any Credit Party or any Subsidiary of any
Credit Party in, or relating to, any Intellectual Property, other than, in each case, as cannot reasonably be expected to affect the Loan
Documents and the transactions contemplated therein and would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
3.17 Brokers’ Fees; Transaction Fees . Except for fees payable to Agent and Lenders, none of the Credit Parties or any of their respective
Subsidiaries has any obligation to any Person in respect of any finder’s, broker’s or investment banker’s fee in connection with the transactions
contemplated hereby.
3.18 Insurance . Schedule 3.18 lists all insurance policies of any nature maintained, as of the Closing Date, for current occurrences by
each Credit Party, including issuers, coverages and deductibles. Each of the Credit Parties and each of their respective Subsidiaries and their
respective Properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrowers, in such
amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses of the same size
and character as the business of the Credit Parties and, to the extent relevant, owning similar Properties in localities where such Person
operates.
3.19 Ventures, Subsidiaries and Affiliates; Outstanding Stock . Except as set forth on Schedule 3.19 , as of the Closing Date, no Credit
Party and no Subsidiary of any Credit Party (a) has any Subsidiaries, or (b) is engaged in any joint venture or partnership with any other
Person, or is an Affiliate of any other Person. All issued and outstanding Stock and Stock Equivalents of each of the Credit Parties and each of
their respective Subsidiaries are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than, with
respect to the Stock and Stock Equivalents of the Borrowers and Subsidiaries of the Borrowers, those in favor of Agent, for the benefit of the
Secured Parties, and those in favor of Notes Collateral Trustee. All such securities were issued in compliance with all applicable state,
provincial, territorial and federal laws concerning the issuance of securities. All of the issued and outstanding Stock of each Credit Party (other
than Holdings), each Subsidiary of each Credit Party and, as of the Closing Date, Holdings is owned by each of the Persons and in the amounts
set forth in
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Schedule 3.19 . Except as set forth on Schedule 3.19 , there are no pre-emptive or other outstanding rights to purchase, options, warrants or
similar rights or agreements pursuant to which any Credit Party may be required to issue, sell, repurchase or redeem any of its Stock or Stock
Equivalents or any Stock or Stock Equivalents of its Subsidiaries. Set forth in Schedule 3.19 is a true and complete organizational chart of
Holdings and all of its Subsidiaries, which the Credit Parties shall update upon notice to Agent promptly following the incorporation,
organization or formation of any Subsidiary and promptly following the completion of any Permitted Acquisition.
3.20 Jurisdiction of Organization; Chief Executive Office . Schedule 3.20 lists each Credit Party’s jurisdiction of organization, legal name
and organizational identification number, if any, and the location of such Credit Party’s chief executive office or sole place of business or
domicile (within the meaning of the Civil Code of Quebec), in each case as of the Closing Date, and such Schedule 3.20 also lists all
jurisdictions of organization and legal names of such Credit Party for the five years preceding the Closing Date. In relation to each Credit Party
and any Subsidiary of a Credit Party, in each case incorporated in a member state of the European Union, for the purposes of The Council of
the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the “Regulation”), its centre of main interest (as that term is used in
Article 3(1) of the Regulation) is situated in its jurisdiction of incorporation and it has no “establishment” (as that term is used in Article 2(h) of
the Regulations) in any other jurisdiction.
3.21 Locations of Inventory, Equipment and Books and Records . Each Credit Party’s inventory and equipment (other than inventory or
equipment in transit) and books and records concerning the Collateral are kept at the locations listed on Schedule 3.21 (which Schedule 3.21
shall be promptly updated by the Credit Parties upon notice to Agent as permanent Collateral locations change). Each Credit Party that keeps
records in the Province of Quebec relating to Collateral keeps a duplicate copy thereof at a location outside the Province of Quebec, as listed on
Schedule 3.21 .
3.22 Deposit Accounts and Other Accounts . Schedule 3.22 lists all banks and other financial institutions at which any Credit Party
maintains deposit or other accounts as of the Closing Date, and such Schedule correctly identifies the name, address and any other relevant
contact information reasonably requested by Agent with respect to each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.
3.23 Government Contracts . Except as set forth on Schedule 3.23 , as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party’s Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C.
Section 3727), the Financial Administration Act (Canada) or any similar state, provincial or local law.
3.24 Customer and Trade Relations . As of the Closing Date, there exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or change in (a) the business relationship of any
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Credit Party with any customer or group of affiliated customers whose purchases during the preceding twelve (12) calendar months caused
them to be ranked among the ten largest customers of such Credit Party or (b) the business relationship of any Credit Party with any supplier
essential to its operations.
3.25 Bonding . Except as set forth on Schedule 3.25 , as of the Closing Date, no Credit Party is a party to or bound by any surety bond
agreement, indemnification agreement therefor or bonding requirement with respect to products or services sold by it.
3.26 Purchase Agreement . As of the Closing Date, the Borrowers have delivered to Agent a complete and correct copy of the Purchase
Agreement (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith). No Credit Party and no other Person party thereto is in material default in the performance or
compliance with any provisions thereof. The Purchase Agreement complies with, and the Closing Date Acquisition has been consummated in
all material respects in accordance with, all applicable Requirements of Law. The Purchase Agreement is in full force and effect as of the
Closing Date and has not been terminated, rescinded or withdrawn. All material requisite approvals by Governmental Authorities having
jurisdiction over Seller, any Credit Party or the other Persons referenced therein with respect to the transactions contemplated by the Purchase
Agreement have been obtained, and no such approvals impose any conditions to the consummation of the transactions contemplated by the
Purchase Agreement or to the conduct by any Credit Party of its business thereafter. To the best of each Credit Party’s knowledge, none of the
Seller’s representations or warranties in the Purchase Agreement contain any untrue statement of a material fact or omit any fact necessary to
make the statements therein not misleading. Each of the representations and warranties given by each applicable Credit Party in the Purchase
Agreement is true and correct in all material respects. Notwithstanding anything contained in the Purchase Agreement to the contrary, such
representations and warranties of the Credit Parties are incorporated into this Agreement by this Section 3.26 and shall, solely for purposes of
this Agreement and the benefit of Agent and Lenders, survive the consummation of the Closing Date Acquisition.
3.27 Status of Holding Companies . No Holding Company has engaged in any business activities and does not own any Property other
than (i) ownership of the Stock and Stock Equivalents of its direct Subsidiaries, (ii) activities and contractual rights incidental to maintenance
of its corporate existence and (iii) performance of its obligations under the Loan Documents and Related Agreements to which it is a party.
3.28 Other Financing Documents . As of the Closing Date, the Borrowers have delivered to Agent a complete and correct copy of the
Indenture Documents, the Factoring Facility Documents and the Closing Date Equity Transaction Documents (including, in each case, all
schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection
therewith).
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3.29 Full Disclosure . None of the representations or warranties made by any Credit Party or any of their Subsidiaries in the Loan
Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit,
report, statement or certificate furnished by or on behalf of any Credit Party or any of their Subsidiaries in connection with the Loan
Documents (including the offering and disclosure materials, if any, delivered by or on behalf of any Credit Party to Agent or the Lenders prior
to the Closing Date), contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or
delivered.
3.30 Foreign Assets Control Regulations and Anti-Money Laundering . Each Credit Party and each Subsidiary of each Credit Party is in
compliance in all material respects with all economic sanctions laws of any applicable Governmental Authority, Executive Orders and
implementing regulations as promulgated by the U.S. Treasury Department’s Office of Foreign Assets Control (“ OFAC ”), and all applicable
anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it and all
regulations issued pursuant to the Canadian AML Legislation and all other related laws of any applicable Governmental Authority. No Credit
Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the U.S. government on the list of the Specially Designated
Nationals and Blocked Persons (the “ SDN List” ) with which a U.S. Person cannot deal with or otherwise engage in business transactions,
(ii) is a Person who is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business
transactions with such Person, (iii) is controlled by (including by virtue of such person being a director or owning voting shares or interests), or
acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List or a foreign government that is the target of U.S. economic
sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under
U.S. law, (iv) is a Person designated by the Canadian government on any list set out in the United Nations Al-Qaida and Taliban Regulations,
the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism or the Criminal Code (collectively, the “
Terrorist Lists ”) with which a Canadian Person cannot deal with or otherwise engage in business transactions, (v) is a Person who is otherwise
the target of Canadian or U.K. economic sanctions laws such that a Canadian Person or a U.K. Person cannot deal or otherwise engage in
business transactions with such Person or (vi) is controlled by (including by virtue of such Person being a director or owning voting shares or
interests), or acts, directly or indirectly, for or on behalf of, any Person on any Terrorist List or a foreign government that is the target of
Canadian or U.K. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document
would be prohibited under Canadian or English law.
3.31 Patriot Act; Counter-Terrorism Regulations . The Credit Parties, each of their Subsidiaries and each of their Affiliates are in
compliance with (a) the Trading with the Enemy Act (in the case of the Canadian Credit Parties, subject to applicable Canadian Requirements
of Law), and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or
executive order relating
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thereto, (b) the Patriot Act, (c) Canadian AML Legislation, and (d) all laws of any applicable jurisdiction relating to “ know your customer ”
and anti-money laundering and all rules and regulations. No part of the proceeds of any Loan will be used directly or indirectly for any
payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977 or the Corruption of Foreign Public Officials Act (Canada) or the U.K. Bribery Act 2010.
3.32 [ Intentionally Omitted. ]
3.33 Physical Condition of Mortgaged Properties. (a) Each of the Mortgaged Properties, including all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment,
elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, is, to each Credit Party’s knowledge, in
good condition, order and repair in all material respects, and (b) to each Credit Party’s knowledge, there exists no structural or other material
defects or damages in any of the Mortgaged Properties, whether latent or otherwise. No Credit Party has received written notice from any
insurance company or bonding company of any defects or inadequacies in any of the Mortgaged Properties, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.
3.34 Access . Each of the Mortgaged Properties has adequate rights of access to public ways and is served by adequate water, sewer,
sanitary sewer and storm drain facilities. All public utilities necessary or convenient to the full use and enjoyment of each of the Mortgaged
Properties are located in the public right-of-way abutting each Mortgaged Property, and all such utilities are connected so as to serve each
Mortgaged Property without passing over other property, except to the extent such other property is subject to a perpetual easement for such
utility benefiting such Mortgaged Property. All roads necessary for the full utilization of each Mortgaged Property for its current purpose have
been completed and dedicated to public use and accepted by all Governmental Authorities.
ARTICLE IV.
AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other
Obligation (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) shall remain unpaid
or unsatisfied:
4.1 Financial Statements . Each Credit Party shall maintain, and shall cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to permit the preparation of financial
44
statements in conformity with GAAP (provided that unaudited interim financial statements shall not be required to have footnote disclosures
and are subject to normal year-end adjustments). The Borrower Representative shall deliver to Agent and each Lender by Electronic
Transmission and in detail reasonably satisfactory to Agent and the Required Lenders:
(a) as soon as available, but not later than one hundred twenty (120) days after the end of each Fiscal Year, a copy of the audited
consolidated balance sheets of Sponsor and its Subsidiaries as at the end of such year and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous
Fiscal Year, and accompanied by the report of any “Big Four” or other independent certified public accounting firm reasonably acceptable to
Agent which report shall (i) contain an unqualified opinion, stating that such consolidated financial statements present fairly in all material
respects the financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years and (ii) not
include any explanatory paragraph expressing substantial doubt as to going concern status; provided that, the audited financial statements,
information and other documents required to be provided as described in the preceding sentence shall be (x) delivered with respect to Sponsor
and its Subsidiaries as long as the consolidated total assets of the Credit Parties and their Subsidiaries comprise at least eighty percent (80%) of
the consolidated total assets of Sponsor and its Subsidiaries and, in the event such threshold is not maintained as of the end of such year, the
foregoing audited financial statements, information and other documents shall instead be delivered for Holdings and its Subsidiaries as of the
end of such year and (y) in any case, accompanied by an unaudited schedule of consolidating financial information relating to the North
American and non-North American business entities in detail reasonably acceptable to Agent; and
(b) as soon as available, but not later than (i) thirty (30) days after the end of each fiscal month of each year, a copy of the unaudited
consolidated and consolidating balance sheets of Holdings and each of its Subsidiaries, and the related consolidated and consolidating
statements of income and shareholders’ equity and (ii) thirty (30) days after the end of each Fiscal Quarter, a copy of the unaudited
consolidated and consolidating statement of cash flows of Holdings and each of its Subsidiaries, as of the end of such fiscal month or Fiscal
Quarter, as applicable, and for the portion of the Fiscal Year then ended, each of which shall be complete and correct and fairly present, in all
material respects, in accordance with GAAP, the financial position and the results of operations of Holdings and each of its Subsidiaries,
subject to normal year-end adjustments and absence of footnote disclosures.
4.2 Certificates; Other Information . The Borrower Representative shall furnish to Agent (and Agent shall thereafter make available to
each Lender) by Electronic Transmission:
(a) as soon as available, but not later than forty-five (45) days after the end of each Fiscal Quarter, (i) a management discussion and
analysis report, in reasonable detail, signed by the chief financial officer of the Borrower Representative,
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describing the operations and financial condition of the Credit Parties and each of their Subsidiaries for the Fiscal Quarter and the portion of the
Fiscal Year then ended, and (ii) a report setting forth in comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the most recent projections for the current Fiscal Year delivered pursuant to
Section 4.2(k) and discussing the reasons for any significant variations;
(b) concurrently with the delivery of the financial statements referred to in Sections 4.1(a) and 4.1(b) , a fully and properly
completed certificate in the form of Exhibit 4.2(b) (a “ Compliance Certificate ”), certified on behalf of the Borrowers by a Responsible Officer
of the Borrower Representative;
(c) promptly after the same are sent, copies of all financial statements and reports which any Credit Party or the Sponsor sends to its
shareholders or other equity holders, as applicable, generally and promptly after the same are filed, copies of all financial statements and
regular, periodic or special reports which such Person may make to, or file with, the Securities and Exchange Commission or any successor or
similar Governmental Authority;
(d) as soon as available and in any event within fifteen (15) days after the end of each calendar month, and within three (3) Business
Days after the end of each calendar week from and after the date on which Availability is less than the greater of $16,500,000 and 15% of the
Aggregate Revolving Loan Commitment at any time until such date on which Availability is greater than or equal to the greater of $16,500,000
and 15% of the Aggregate Revolving Loan Commitment for a period of sixty (60) consecutive calendar days, and at such other times as Agent
may reasonably require, a Borrowing Base Certificate, certified on behalf of the Borrowers by a Responsible Officer of the Borrower
Representative, setting forth the U.S. Borrowing Base and the Canadian Borrowing Base as at the end of the most-recently ended fiscal month
or as at such other date as Agent may reasonably require; provided that, to the extent that such Borrowing Base Certificate is required to be
delivered more frequently than on a monthly basis, the Inventory reporting contained therein may, if necessary after the exercise of reasonable
and good faith efforts, contain estimates calculated in a manner previously disclosed to Agent and acceptable to Agent in its reasonable
discretion;
(e) concurrently with the delivery of the Borrowing Base Certificate, a summary of Inventory by location and type with a
supporting perpetual Inventory report, in each case accompanied by such supporting detail and documentation as shall be requested by Agent in
its reasonable discretion; provided that, to the extent that such Inventory reporting is required to be delivered more frequently than on a
monthly basis, such reporting may, if necessary after the exercise of reasonable and good faith efforts, contain estimates calculated in a manner
previously disclosed to Agent and acceptable to Agent in its reasonable discretion;
(f) concurrently with the delivery of the Borrowing Base Certificate, a detailed aging of Accounts, accompanied by such supporting
detail and documentation as shall be requested by Agent in its reasonable discretion;
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(g) concurrently with the delivery of the monthly Borrowing Base Certificate, a detailed aging of accounts payable accompanied by
such supporting detail and documentation as shall be requested by Agent in its reasonable discretion;
(h) concurrently with the delivery of the Borrowing Base Certificate or at such more frequent intervals as Agent may request from
time to time (together with a copy of all or any part of such delivery requested by any Lender in writing after the Closing Date), collateral
reports, including all additions and reductions (cash and non-cash) with respect to Accounts of the Credit Parties in each case accompanied by
such supporting detail and documentation as shall be requested by Agent in its reasonable discretion each of which shall be prepared by the
Borrower Representative as of the last day of the immediately preceding week or the date two (2) days prior to the date of any request;
(i) to Agent, at the time of delivery of each of the monthly financial statements delivered pursuant to Section 4.1(b) a reconciliation
of the following, in each case, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable
discretion:
(A) the most recent Borrowing Base Certificate and month-end Accounts aging of each Borrower to such Borrower’s general
ledger and monthly Financial Statements delivered pursuant to Section 4.1(b) ;
(B) the perpetual Inventory by location to each Borrower’s most recent Borrowing Base Certificate, general ledger and
monthly Financial Statements delivered pursuant to Section 4.1(b) ;
(C) the accounts payable aging to each Borrower’s general ledger and monthly Financial Statements delivered pursuant to
Section 4.1(b) ; and
(D) the outstanding Loans as set forth in the monthly loan account statement provided by Agent to each Borrower’s general
ledger and monthly Financial Statements delivered pursuant to Section 4.1(b) ;
(j) at the time of delivery of each of the financial statements delivered pursuant to Section 4.1 , (i) a listing of government contracts
of each Borrower subject to the Federal Assignment of Claims Act of 1940 or the Financial Administration Act (Canada) or any similar state or
municipal law; and (ii) a list of any applications for the registration of any Patent, Trademark or Copyright filed by any Credit Party with the
United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in each case entered into or filed
in the prior Fiscal Quarter;
(k) as soon as available and in any event no later than thirty (30) days after each Fiscal Year end of the Borrowers, projections of
the Credit Parties (and their Subsidiaries’) consolidated and consolidating financial performance for the forthcoming three Fiscal Years on a
year by year basis, and for the forthcoming Fiscal Year on a month by month basis;
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(l) promptly upon receipt thereof, copies of any reports submitted by the Borrowers’ certified public accountants in connection with
each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Credit Party made by
such accountants;
(m) as soon as available and in any event no later than three (3) Business Days after the last day of each Fiscal Quarter
(commencing with the Fiscal Quarter ending June 30, 2015), an Applicable Margin Certificate for such calendar quarter, certified on behalf of
the Borrower Representative by a Responsible Officer;
(n) to the extent that Real Alloy Acquisition incurs any Notes Pari Passu Lien Obligations after the Closing Date in reliance on
Section 5.5(f)(ii) , at least ten (10) Business Days prior to such incurrence, a certificate, in form and substance reasonably satisfactory to Agent,
signed by a Responsible Officer of the Borrower Representative (i) demonstrating compliance with the conditions to the incurrence of such
Indebtedness set forth in the Indenture Documents in effect as of the Closing Date and (ii) summarizing the material terms of any such
additional Notes Pari Passu Lien Obligations issued after the Closing Date;
(o) promptly following the execution of any Permitted Supplier Financing Arrangement, executed copies of all documentation
regarding such Permitted Supplier Financing Arrangement;
(p) concurrently with the delivery of the Borrowing Base Certificate, the aggregate amount of any Accounts that have been sold
pursuant to Permitted Supplier Financing Arrangements during the applicable fiscal month and the applicable Fiscal Year (or portion thereof)
and the applicable discount rate with respect to such sales; and
(q) promptly, such additional business, financial, collateral, corporate affairs, perfection certificates and other information as Agent
may from time to time reasonably request.
4.3 Notices . The Borrowers shall notify promptly (and in no event later than five (5) Business Days after a Responsible Officer becomes
aware thereof) Agent of each of the following (and Agent shall thereafter notify each Lender):
(a) the occurrence or existence of any Default or Event of Default, or any event or circumstance that foreseeably will become a
Default or Event of Default;
(b) any breach or non-performance of, or any default under, any Contractual Obligation of any Credit Party or any Subsidiary of
any Credit Party, or any violation of, or non-compliance with, any Requirement of Law, in each case, which would reasonably be expected to
result, either individually or in the aggregate, in a Material Adverse Effect, including a description of such breach, non-performance, default,
violation or non-compliance and the steps, if any, such Person has taken, is taking or proposes to take in respect thereof;
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(c) any dispute, litigation, investigation, proceeding or suspension which may exist at any time between any Credit Party or any
Subsidiary of any Credit Party and any Governmental Authority which would reasonably be expected to result, either individually or in the
aggregate, in Liabilities in excess of $2,000,000;
(d) the commencement of, or any material development in, any litigation or proceeding affecting any Credit Party or any Subsidiary
of any Credit Party or its respective property (i) in which the amount of damages claimed is $2,500,000 or more, (ii) in which injunctive or
similar relief is sought and which, if adversely determined, would reasonably be expected to have a Material Adverse Effect, or (iii) in which
the relief sought is an injunction or other stay of the performance of this Agreement, any other Loan Document or any Related Agreement;
(e) (i) the receipt by any Credit Party of any written notice of violation of or potential liability or similar written notice under
Environmental Law, (ii)(A) unpermitted Releases, (B) the existence of any condition that could reasonably be expected to result in violations of
or Liabilities under, any Environmental Law or (C) the commencement of, or any material change to, any action, investigation, suit,
proceeding, audit, claim, demand, dispute alleging a violation of or Liability under any Environmental Law which in the case of clauses (A) ,
(B) and (C) above, in the aggregate for all such clauses, would reasonably be expected to result in Material Environmental Liabilities, (iii) the
receipt by any Credit Party of notification that any Property of any Credit Party is subject to any Lien in favor of any Governmental Authority
securing, in whole or in part, Environmental Liabilities and (iv) any proposed acquisition or lease of Real Estate, if such acquisition or lease
would have a reasonable likelihood of resulting in Material Environmental Liabilities;
(f) (i) on or prior to any filing by any ERISA Affiliate of any notice of any reportable event under Section 4043 of ERISA, or intent
to terminate any Title IV Plan, a copy of such notice (ii) promptly, and in any event within ten (10) days, after any officer of any ERISA
Affiliate knows or has reason to know that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect
to any Title IV Plan or Multiemployer Plan, a notice describing such waiver request and any action that any ERISA Affiliate proposes to take
with respect thereto, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto, and (iii) promptly, and in any event
within ten (10) days after any officer of any ERISA Affiliate knows or has reason to know that an ERISA Event has occurred, a notice
describing such ERISA Event, and any action that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any
notices received from or filed with the PBGC, IRS, Multiemployer Plan or other Benefit Plan pertaining thereto;
(g) any Material Adverse Effect subsequent to the date of the most recent audited financial statements delivered to Agent and
Lenders pursuant to this Agreement;
(h) any material change in accounting policies or financial reporting practices by any Credit Party or any Subsidiary of any Credit
Party;
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(i) any labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown or other labor
disruption against or involving any Credit Party or any Subsidiary of any Credit Party if the same would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;
(j) the creation, establishment or acquisition of any Subsidiary or the issuance by or to any Credit Party of any Stock or Stock
Equivalent (other than issuances by Holdings of Stock or Stock Equivalents not requiring a mandatory prepayment hereunder);
(k) any amendment, waiver, supplement or other modification of any of the Indenture Documents, the Factoring Facility Documents
or the Closing Date Equity Transaction Documents (accompanied by a true, correct and complete copy thereof);
(l) if any Credit Party acquires any Margin Stock; and
(m) any event reasonably expected to result in a mandatory prepayment of the Obligations pursuant to Section 1.8 .
Each notice pursuant to this Section 4.3 shall be in electronic form accompanied by a statement by a Responsible Officer of the Borrower
Representative, on behalf of the Borrowers, setting forth details of the occurrence referred to therein, and stating what action the Borrowers or
other Person proposes to take with respect thereto and at what time. Each notice under Section 4.3(a) shall describe with particularity any and
all clauses or provisions of this Agreement or other Loan Document that have been breached or violated.
4.4 Preservation of Corporate Existence, Etc . Each Credit Party shall, and shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its organizational existence and good standing under the laws of its jurisdiction of
incorporation, organization or formation, as applicable, except as permitted by Section 5.3 ;
(b) preserve and maintain in full force and effect all rights, privileges, qualifications, permits, licenses and franchises necessary in
the normal conduct of its business except in connection with any sale of assets permitted by Sections 5.2 and any other transaction permitted by
Section 5.3 and except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;
(c) preserve or renew all of its registered Trademarks, the non-preservation of which would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect; and
(d) (i) conduct its business and affairs without the knowing infringement of or knowing interference with any Intellectual Property
of any other Person in any material respect and (ii) shall comply in all material respects with the terms of its IP Licenses.
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4.5 Maintenance of Property . Each Credit Party shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its
Property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted and shall make all
necessary repairs thereto and renewals and replacements thereof except where the failure to do so would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
4.6 Insurance .
(a) Each Credit Party shall, and shall cause each of its Subsidiaries to, (i) maintain or cause to be maintained in full force and effect
all policies of insurance of any kind with respect to the Property and businesses of the Credit Parties and such Subsidiaries (including policies
of fire, theft, product liability, public liability, Flood Insurance, property damage, other casualty, employee fidelity, workers’ compensation,
business interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in
each case that are not Affiliates of the Borrowers) of a nature and providing such coverage as is sufficient and as is customarily carried by
businesses of the size and character of the business of the Credit Parties, (ii) with respect to each of the Mortgaged Properties, maintain or
cause to be maintained in full force and effect, in addition to the policies required under clause (i) above, the insurance policies and coverages
described on Schedule 3.18 , subject to changes in policies and coverages based upon the availability of insurance for Persons engaged in
ownership and operation of properties similar to each of the Mortgaged Properties and (iii) cause all such insurance relating to any Property or
business of any Credit Party to name Agent as additional insured or lenders loss payee as agent for the Lenders, as appropriate. All policies of
insurance on real and personal Property of the Credit Parties will contain an endorsement, in form and substance acceptable to Agent, showing
loss payable to Agent (Form CP 1218 or equivalent and naming Agent as lenders loss payee as agent for the Lenders) and extra expense and
business interruption endorsements. Such endorsement, or an independent instrument furnished to Agent, will provide that the insurance
companies will give Agent at least forty-five (45) days’ prior written notice before any such policy or policies of insurance shall be altered or
canceled and that no act or default of the Credit Parties or any other Person shall affect the right of Agent to recover under such policy or
policies of insurance in case of loss or damage. Each Credit Party shall deliver to Agent within ten (10) days of receipt of notice from any
insurer, a copy of any notice of cancellation or material change in coverage with respect to the affected Mortgaged Property. Each Credit Party
shall direct all present and future insurers under its “All Risk” policies of property insurance to pay all proceeds payable thereunder directly to
Agent. If any insurance proceeds are paid by check, draft or other instrument payable to any Credit Party and Agent jointly, Agent may endorse
such Credit Party’s name thereon and do such other things as Agent may deem advisable to reduce the same to cash. Agent reserves the right at
any time, upon its determination that any Credit Party’s risk profile has changed following the Closing Date, to require additional forms or
categories and limits of insurance (it being acknowledged and agreed that, so
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long as the Credit Parties do not engage in any line of business substantially different from those lines of business carried on by it on the
Closing Date, Agent will not require policies of insurance of a form or category materially different from those required by Agent as of the
Closing Date). Notwithstanding the requirement in clause (i) above, Flood Insurance shall not be required for (x) Real Estate not located in a
Special Flood Hazard Area, or (y) Real Estate located in a Special Flood Hazard Area in a community that does not participate in the National
Flood Insurance Program.
(b) Unless the Credit Parties provide Agent with evidence of the insurance coverage required by this Agreement (including, Flood
Insurance), Agent may purchase insurance (including, Flood Insurance) at the Credit Parties’ expense to protect Agent’s and Lenders’ interests
in the Credit Parties’ and their Subsidiaries’ properties. This insurance may, but need not, protect the Credit Parties’ and their Subsidiaries’
interests. The coverage that Agent purchases may not pay any claim that any Credit Party or any Subsidiary of any Credit Party makes or any
claim that is made against such Credit Party or any Subsidiary in connection with said Property. The Credit Parties may later cancel any
insurance purchased by Agent, but only after providing Agent with evidence that there has been obtained insurance as required by this
Agreement. If Agent purchases insurance, the Credit Parties will be responsible for the costs of that insurance, including interest and any other
expenses Agent may incur in connection with the placement of insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance shall be added to the Obligations. The costs of the insurance may be more than the cost of insurance the
Credit Parties may be able to obtain on their own. In furtherance of the foregoing, the Credit Parties shall comply with each of the requirements
set forth on Schedule 4.6 .
4.7 Payment of Obligations . Each Credit Party shall, and shall cause each of its Subsidiaries to, pay, discharge and perform as the same
shall become due and payable or required to be performed:
(a) all Tax liabilities, assessments and governmental charges or levies upon it or its Property, unless (i) the same are being contested
in good faith by appropriate proceedings diligently prosecuted which stay the filing or enforcement of any Lien and for which adequate
reserves in accordance with GAAP are being maintained by such Person; and (ii) the aggregate Liabilities secured by such Lien do not exceed
$3,000,000.
(b) all lawful claims which, if unpaid, would by law become a Lien upon its Property unless the same are being contested in good
faith by appropriate proceedings diligently prosecuted which stay the imposition or enforcement of any Lien and for which adequate reserves in
accordance with GAAP are being maintained by such Person;
(c) the performance of all obligations under any Contractual Obligation to such Credit Party or any of its Subsidiaries is bound, or
to which it or any of its Property is subject, including the Related Agreements, except where the failure to perform would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse Effect; and
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(d) payments to the extent necessary to avoid the imposition of a Lien with respect to, (1) the involuntary termination of any
underfunded Benefit Plan or (2) any Canadian Pension Plan other than inchoate Liens for amounts required to be remitted but not yet due
pursuant to applicable Canadian federal or provincial pension benefits standards legislation.
4.8 Compliance with Laws; Pension Plans and Benefit Plans .
(a) Each Credit Party shall, and shall cause each of its Subsidiaries to, comply with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business, including all Requirements of Law applicable to the ownership, use and operation of each
of the Mortgaged Properties, except where the failure to comply would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
(b) For each existing, or hereafter adopted, Canadian Pension Plan, each Credit Party shall ensure that all contributions are remitted
in a timely fashion in accordance with the terms thereof, any funding agreements and all applicable laws, except as would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse Effect.
4.9 Inspection of Property and Books and Records; Audits; Appraisals .
(a) Each Credit Party shall maintain and shall cause each of its Subsidiaries to maintain books of record and account entries in
conformity with GAAP consistently applied.
(b) Each Credit Party shall, and shall cause each of its Subsidiaries to, with respect to each owned, leased, or controlled property,
during normal business hours and upon reasonable advance notice (unless an Event of Default shall have occurred and be continuing, in which
event no notice shall be required and Agent shall have access at any and all times during the continuance thereof): (i) provide access to such
property to Agent and any of its Related Persons, as frequently as Agent determines to be appropriate; and (ii) permit Agent and any of its
Related Persons to conduct field examinations, audit, inspect and make extracts and copies (or take originals if reasonably necessary) from all
of such Credit Party’s books and records, and evaluate and make physical verifications of the Inventory and other Collateral in any manner and
through any medium that Agent considers advisable, in each instance, at the Credit Parties’ expense; provided the Credit Parties shall only be
obligated to reimburse Agent for the expenses for (i) one such field examination, audit and inspection during any Fiscal Year, (ii) a second field
examination, audit and inspection during such Fiscal Year if (A) at any time for at least thirty (30) consecutive days during such Fiscal Year
Availability is or has been less than the greater of $33,000,000 and 30% of the Aggregate Revolving Loan Commitment or (B) on any day
during such Fiscal Year Availability is less than the
53
greater of $27,500,000 and 25% of the Aggregate Revolving Loan Commitment, but, in the case of each of clauses (A) or (B) , greater than or
equal to the greater of $16,500,000 and 15% of the Aggregate Revolving Loan Commitment and (iii) a third field examination, audit and
inspection during such Fiscal Year if at any time during such Fiscal Year Availability is less than the greater of $16,500,000 and 15% of the
Aggregate Revolving Loan Commitment; provided further that no such limits shall apply if an Event of Default has occurred and is continuing.
Any Lender may accompany Agent or its Related Persons in connection with any inspection at such Lender’s expense. Each Credit Party which
keeps records relating to Collateral in the Province of Quebec shall at all times keep a duplicate copy thereof at a location outside the Province
of Quebec, as listed in Schedule 3.21 .
(c) Upon Agent’s request from time to time, the Credit Parties shall permit and enable Agent to obtain appraisals in form and
substance and from appraisers reasonably satisfactory to Agent stating (i) the then Net Orderly Liquidation Value, or such other value as
determined by Agent, of all or any portion of the Inventory of any Credit Party or any Subsidiary of any Credit Party and (ii) the fair market
value, or such other value as determined by Agent (for example, replacement cost for purposes of Flood Insurance), of any Real Estate of any
Credit Party or any Subsidiary of any Credit Party, including any appraisal required to comply with FIRREA; provided , that notwithstanding
any provision herein to the contrary, the Credit Parties shall only be obligated to reimburse Agent for the expenses for (i) one set of such
appraisals during any Fiscal Year, (ii) a second set of such appraisals during such Fiscal Year if (A) at any time for at least thirty
(30) consecutive days during such Fiscal Year Availability is or has been less than the greater of $33,000,000 and 30% of the Aggregate
Revolving Loan Commitment or (B) on any day during such Fiscal Year Availability is less than the greater of $27,500,000 and 25% of the
Aggregate Revolving Loan Commitment, but, in the case of each of clauses (A) or (B) , greater than or equal to the greater of $16,500,000 and
15% of the Aggregate Revolving Loan Commitment and (iii) a third set of such appraisals during such Fiscal Year if at any time during such
Fiscal Year Availability is less than the greater of $16,500,000 and 15% of the Aggregate Revolving Loan Commitment; provided further that
no such limits shall apply if an Event of Default has occurred and is continuing.
4.10 Use of Proceeds . The Borrowers shall use the proceeds of the Loans and Letters of Credit solely as follows: (a) first, to refinance on
the Closing Date, Prior Indebtedness and then to pay on the Closing Date a portion of the purchase price in respect of the Closing Date
Acquisition, (b) to pay costs and expenses of the Related Transactions and costs and expenses required to be paid pursuant to Section 2.1 , and
(c) for working capital, capital expenditures and other general corporate purposes not in contravention of any Requirement of Law and not in
violation of this Agreement or the other Loan Documents; provided , however that in no event may proceeds of any Loans or Letters of Credit
be used, directly or indirectly, to make a prepayment of the Notes Pari Passu Lien Obligations.
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4.11 Cash Management Systems . Each Credit Party shall enter into, and cause each applicable depository institution, securities
intermediary or commodities intermediary to enter into, one or more Control Agreements providing for “springing” cash dominion (including
providing for “control” thereover as such term is defined in the Securities Transfer Act (2006) (Ontario) in respect of Canadian Collateral) with
respect to each Control Account (other than Disbursement Accounts) and each securities, commodity or similar account maintained by such
Credit Party as of the Closing Date or established or otherwise acquired by such Credit Party after the Closing Date. In addition, if and to the
extent requested by Agent, each Credit Party shall enter into one or more Control Agreements providing for “springing” cash dominion over all
Control Accounts that constitute Disbursement Accounts maintained by such Credit Party as of the Closing Date or established or otherwise
acquired by such Credit Party after the Closing Date. With respect to any Control Accounts subject to such “springing” Control Agreements,
unless a Dominion Period has occurred and is continuing, Agent shall not deliver to the relevant depository institution, securities intermediary
or commodities intermediary a notice or other instruction requiring such Person to transfer funds held in such Control Accounts to the
Collection Account. The Credit Parties shall not maintain cash on deposit in Disbursement Accounts in excess of outstanding checks and wire
transfers payable from such accounts and amounts necessary to meet minimum balance requirements.
4.12 Landlord Agreements . Each Credit Party shall use commercially reasonable efforts to obtain a landlord agreement or bailee or
mortgagee waivers, as applicable, from the lessor of each leased property, bailee in possession of any Collateral or mortgagee of any owned
property with respect to each location where any Collateral with an aggregate fair market value in excess of $500,000 or any books and records
with respect to any Collateral is stored or located, which agreement shall be reasonably satisfactory in form and substance to Agent.
4.13 Further Assurances .
(a) Each Credit Party shall ensure that all written information, exhibits and reports furnished to Agent or the Lenders do not and will
not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to Agent and the Lenders
and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgement or recordation
thereof.
(b) Promptly upon request by Agent, each Credit Party shall (and, subject to the limitations set forth herein and in the Collateral
Documents, shall cause each of its Subsidiaries to) take such additional actions and execute such documents as Agent may reasonably require
from time to time in order (i) to carry out more effectively the purposes of this Agreement or any other Loan Document, (ii) to subject to the
Liens created by any of the Collateral Documents any of the Properties, rights or interests covered by any of the Collateral Documents,
(iii) subject to customary “Funds Certain Provisions” with respect to perfection of Liens on assets acquired in a Permitted Acquisition or other
Investment permitted hereunder, to perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and the
Liens intended to
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be created thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve, protect and confirm to the Secured Parties the rights
granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document. Without limiting the generality of the
foregoing and except as otherwise approved in writing by Required Lenders, the U.S. Credit Parties shall cause each of their Domestic
Subsidiaries (other than Excluded Domestic Subsidiaries and IMSAMET of Arizona) and Foreign Subsidiaries (other than Excluded Foreign
Subsidiaries), promptly after formation or acquisition thereof, to guaranty the U.S. Obligations and to cause each such Subsidiary to grant to
Agent, for the benefit of the Secured Parties, a security interest in, subject to the limitations set forth herein and in the Collateral Documents, all
of such Subsidiary’s Property to secure such guaranty. Furthermore and except as otherwise approved in writing by Required Lenders, each
U.S. Credit Party shall pledge, and shall cause each of its Domestic Subsidiaries (other than Excluded Domestic Subsidiaries and IMSAMET of
Arizona) and Foreign Subsidiaries (other than Excluded Foreign Subsidiaries) to pledge, all of the Stock and Stock Equivalents of each of its
Domestic Subsidiaries (other than Excluded Domestic Subsidiaries) and Foreign Subsidiaries (other than Excluded Foreign Subsidiaries) and
sixty-five percent (65%) of the outstanding voting Stock and Stock Equivalents and one hundred percent (100%) of outstanding non-voting
Stock and Stock Equivalents of each Excluded Foreign Subsidiary directly owned by a Credit Party, in each instance, to Agent, for the benefit
of the Secured Parties, to secure the U.S. Obligations, promptly after formation or acquisition of such Subsidiary. Without limiting the
generality of the foregoing and except as otherwise approved in writing by Required Lenders, Holdings shall, and shall cause each of its
Subsidiaries (other than (A) Excluded Foreign Subsidiaries except any Canadian Subsidiary and (B) IMSAMET of Arizona) to, promptly after
formation or acquisition thereof, guaranty the Canadian Obligations and grant to Agent, for the benefit of the Secured Parties, a security interest
in, subject to the limitations hereinafter set forth, all of such Subsidiary’s Property to secure such guaranty. Furthermore and except as
otherwise approved in writing by Required Lenders, Holdings shall, and shall cause each of its Subsidiaries (other than (A) Excluded Foreign
Subsidiaries except any Canadian Subsidiary and (B) IMSAMET of Arizona) to, pledge all of the Stock and Stock Equivalents of each
Subsidiary directly owned by such Person to Agent, for the benefit of the Secured Parties, to secure the Canadian Obligations. In the event that
Holdings or any of its Subsidiaries (other than any Excluded Domestic Subsidiary, IMSAMET of Arizona or any Excluded Foreign Subsidiary)
acquires fee title to any Real Estate, within sixty (60) days after (or such later date as may be agreed by Agent in its reasonable discretion) such
acquisition, such Person shall execute and/or deliver, or cause to be executed and/or delivered, to Agent, (w) an appraisal in form and substance
reasonably acceptable to Agent, to the extent requested by Agent, (x) a fully executed Mortgage, in form and substance reasonably satisfactory
to Agent together with an A.L.T.A. (or Canadian equivalent) lender’s title insurance policy issued by a title insurer reasonably satisfactory to
Agent, in form and substance and in an amount reasonably satisfactory to Agent insuring that the Mortgage is a valid and enforceable first
priority Lien (subject only to any Liens in favor of the Notes Collateral Trustee under the Indenture Documents) on the respective property,
free and clear of all defects, encumbrances and Liens other than Permitted Liens, and (y) then current A.L.T.A. (or Canadian equivalent)
surveys, certified to Agent by a licensed surveyor sufficient to
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allow the issuer of the lender’s title insurance policy to issue such policy without a survey exception. In the event that Holdings or any of its
Subsidiaries acquires any Real Estate, the Credit Parties shall notify Agent in writing of such acquisition within five (5) Business Days, and at
Agent’s request, the Credit Parties shall cause to be delivered to Agent, within thirty (30) days after such request, an environmental site
assessment prepared by a qualified firm reasonably acceptable to Agent, in form and substance reasonably satisfactory to Agent. In addition to
the obligations set forth in Section 4.6(a) , within forty-five (45) days after written notice from Agent to the Credit Parties that any Real Estate
is located in a Special Flood Hazard Area, the Credit Parties shall satisfy the Flood Insurance requirements of Section 4.6(a) . The Credit
Parties shall deliver, or cause to be delivered, to Agent, appropriate resolutions, secretary certificates, certified Organization Documents and, if
requested by Agent, legal opinions relating to the matters described in this Section 4.13 (which opinions shall be in form and substance
reasonably acceptable to Agent and, to the extent applicable, substantially similar to the opinions delivered on the Closing Date), in each
instance with respect to each Credit Party formed or acquired after the Closing Date. In connection with each such pledge of Stock and Stock
Equivalents, the Credit Parties shall deliver, or cause to be delivered, to Agent, irrevocable proxies and stock powers and/or assignments, as
applicable, duly executed in blank.
4.14 Environmental Matters . Each Credit Party shall, and shall cause each of its Subsidiaries to, comply with, and maintain its Real
Estate, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including
by implementing any Remedial Action necessary to achieve such compliance) or that is required by orders and directives of any Governmental
Authority except where the failure to comply would not reasonably be expected to, individually or in the aggregate, result in a Material
Environmental Liability. Without limiting the foregoing, if an Event of Default is continuing or if Agent at any time has a reasonable basis to
believe that there exist violations of Environmental Laws by any Credit Party or any Subsidiary of any Credit Party or that there exist any
Environmental Liabilities, then each Credit Party shall, promptly upon receipt of request from Agent, cause the performance of, and allow
Agent and its Related Persons access to such Real Estate for the purpose of conducting, such environmental audits and assessments, including
any necessary subsurface sampling of soil and groundwater, and cause the preparation of such reports, in each case as Agent may from time to
time reasonably request. Such audits, assessments and reports, to the extent not conducted by Agent or any of its Related Persons, shall be
conducted and prepared by reputable environmental consulting firms reasonably acceptable to Agent and shall be in form and substance
reasonably acceptable to Agent, all under procedures and protocol reasonably designed to maintain the attorney/client privilege applicable to
the results of such audits and assessments.
4.15 Post-Closing Obligations . The Canadian Borrower shall comply with each of the following or deliver to Agent, as applicable, on or
prior to ninety (90) days from the Closing Date (subject to any extensions or waivers as may be granted by Agent in its Permitted Discretion):
(a) evidence in form and substance satisfactory to Agent of the establishment by the Canadian Borrower of new deposit or similar accounts
(collectively,
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the “ Newly-Established Canadian Accounts ”) to be maintained at a depository institution pursuant to a cash management system, in each case
satisfactory to Agent, and (b) duly executed Control Agreements with respect to the Newly-Established Canadian Accounts (other than
Excluded Accounts), in each case in form and substance satisfactory to Agent.
ARTICLE V.
NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other
Obligation (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) shall remain unpaid
or unsatisfied:
5.1 Limitation on Liens . No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, directly or indirectly,
make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its Property, whether now owned or hereafter
acquired, other than the following (“ Permitted Liens ”):
(a) any Lien existing on the Property of a Credit Party or a Subsidiary of a Credit Party on the Closing Date and set forth in
Schedule 5.1 securing Indebtedness outstanding on such date and permitted by Section 5.5(c) , including replacement Liens on the Property
currently subject to such Liens securing Indebtedness permitted by Section 5.5(c) ;
(b) any Lien securing the Obligations created under any Loan Document;
(c) Liens for Taxes (including real property Taxes) (i) which are not past due or remain payable without penalty, or (ii) the
non-payment of which is permitted by Section 4.7 ;
(d) carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other similar Liens arising in the Ordinary
Course of Business which are not past due or remain payable without penalty or which are being contested in good faith and by appropriate
proceedings diligently prosecuted, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto and for
which adequate reserves in accordance with GAAP are being maintained;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the Ordinary Course of Business in
connection with workers’ compensation, unemployment insurance and other social security legislation (including inchoate Liens for amounts
required to be remitted but not yet due pursuant to applicable Canadian federal or provincial pension standards legislation) or to secure the
performance of tenders, statutory obligations, surety, stay, customs and appeals bonds, bids, leases, governmental contract, trade contracts,
performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or to
secure liability to insurance carriers;
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(f) Liens consisting of judgment or judicial attachment liens with respect to judgments the existence of which do not constitute an
Event of Default;
(g) Survey exceptions, easements, rights-of-way, servitudes, sewers, electric lines, telegraph and telephone lines, zoning and other
recorded covenants, conditions, restrictions, reservations, licenses, minor defects or other irregularities in title, and other similar encumbrances
incurred in the Ordinary Course of Business which, either individually or in the aggregate, are not substantial in amount, and which do not in
any case materially detract from the value of the Property subject thereto or interfere in any material respect with the ordinary conduct of the
businesses of any Credit Party or any Subsidiary of any Credit Party;
(h) Liens on any Equipment, Real Estate or other fixed assets acquired or held by any Credit Party or any Subsidiary of any Credit
Party securing Indebtedness incurred or assumed for the purpose of financing (or refinancing) all or any part of the cost of acquiring,
constructing or improving such Property and permitted under Section 5.5(d) ; provided that (i) any such Lien attaches to such Property
concurrently with or within ninety (90) days after the acquisition thereof, (ii) such Lien attaches solely to the Property so acquired, constructed
or improved in such transaction and the proceeds thereof, and (iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such Property;
(i) Liens securing Capital Lease Obligations permitted under Section 5.5(d) ;
(j) any interest or title of a lessor or sublessor under any lease permitted by this Agreement;
(k) Liens arising from the filing of precautionary UCC or PPSA financing statements (or equivalents) with respect to any lease
permitted by this Agreement;
(l) non-exclusive licenses and sublicenses of Intellectual Property granted by a Credit Party and leases or subleases (by a Credit
Party as lessor or sublessor) to third parties in the Ordinary Course of Business not interfering with the business of the Credit Parties or any of
their Subsidiaries;
(m) Liens in favor of collecting banks arising by operation of law under Section 4-210 of the UCC or, with respect to collecting
banks located in the State of New York, under Section 4-208 of the UCC;
(n) Liens (including the right of set-off) in favor of a bank or other depository institution arising as a matter of law encumbering
deposits;
(o) Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of customs duties in
connection with the importation of goods in the Ordinary Course of Business;
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(p) Liens securing (i) obligations in respect of Indebtedness under the Indenture Documents to the extent permitted under
Section 5.5(f) and (ii) the Collateral Trust Hedging Obligations so long as, in each case of clauses (i) and (ii) , such Liens are subject to the
Intercreditor Agreement or, in the case of any Permitted Refinancing of such Indebtedness or obligations, another intercreditor agreement
containing terms, taken as a whole, that are at least as favorable (taken as a whole) to the Secured Parties as those contained in the Intercreditor
Agreement;
(q) with respect to any Mortgaged Property, any Lien or other encumbrance existing on the Closing Date, disclosed in Agent’s
policy of title insurance covering such Mortgaged Property and acceptable to Agent;
(r) Liens securing Real Alloy Germany’s obligations under the Factoring Facility;
(s) Liens on Property of any Foreign Subsidiary (other than Real Alloy Germany) that is not a Credit Party securing Indebtedness of
such Foreign Subsidiary permitted under Section 5.5(m) ;
(t) [Intentionally Omitted];
(u) the reservations, limitations, provisos and conditions expressed in any original grants from the Crown of real or immovable
property located in Canada, which do not materially interfere with (i) the ordinary conduct of the business of the applicable Person or (ii) the
use and enjoyment of such real or immovable property
(v) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading
accounts or other brokerage accounts to the extent such Liens secure obligations relating to such account that are incurred in the Ordinary
Course of Business and not for speculative purposes; provided that the aggregate amount of cash and Cash Equivalents maintained in such
accounts subject to such Liens does not exceed $5,000,000 in the aggregate at any time outstanding;
(w) Liens on cash and Cash Equivalents securing obligations arising under Rate Contracts entered into in the Ordinary Course of
Business for bona fide hedging purposes and not for speculative purposes; provided that the aggregate amount of cash and Cash Equivalents
subject to such Liens does not exceed $5,000,000 in the aggregate at any time outstanding;
(x) Liens on unearned insurance premiums securing the financing thereof to the extent permitted under Section 5.5(l) to the extent
such Liens are in favor of the applicable insurance carrier;
(y) Liens on Inventory and the proceeds thereof arising out of consignment, bailment, title retention or similar arrangements for the
sale of goods entered into by any Borrower or any Subsidiary of a Borrower in the Ordinary Course of Business solely to the extent that any
such Inventory or proceeds subject to such Liens can be reasonably identified by Agent and verified by Agent as being excluded by the
Borrowers from the most recent Borrowing Base Certificate delivered by the Borrowers to Agent;
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(z) Liens on Property acquired pursuant to a Permitted Acquisition, or on Property of a Subsidiary of a Credit Party in existence at
the time such Subsidiary is acquired pursuant to a Permitted Acquisition, in each instance, other than Accounts, Inventory, deposit accounts and
cash on deposit therein; provided that (i) any Indebtedness that is secured by such Liens in permitted to exist under Section 5.5(i) and (ii) such
Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any Property
of a Credit Party or any of its Subsidiaries;
(aa) customary options, put and call arrangements, rights of first refusal and similar rights relating to Investments in joint ventures
and partnerships so long as such options, arrangements or rights relate solely to such joint ventures and partnerships and the assets thereof;
(bb) Liens arising from precautionary UCC or PPSA financing statement filings on Accounts sold pursuant to Permitted Supplier
Financing Arrangements;
(cc) Liens securing reimbursement obligations incurred in the Ordinary Course of Business for letters of credit to the extent
permitted under Section 5.9(g) ; provided that such Liens encumber only cash or Cash Equivalents in an aggregate amount not to exceed 103%
of such obligations;
(dd) Liens securing reimbursement obligations incurred for Existing Letters of Credit to the extent permitted under Section 5.9(h) ;
and
(ee) other Liens securing obligations which obligations do not exceed $10,000,000 in the aggregate at any time outstanding;
provided that such Liens that attach to ABL Priority Collateral shall not secure obligations exceeding $2,000,000 in the aggregate at any time
outstanding.
5.2 Disposition of Assets . No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, directly or
indirectly, sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) any Property (including the
Stock of any Subsidiary of any Credit Party, whether in a public or a private offering or otherwise, and accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing, except:
(a) dispositions in the Ordinary Course of Business to any Person other than an Affiliate of a Credit Party, of (i) Inventory,
(ii) worn-out or surplus Equipment having a book value not exceeding $5,000,000 in the aggregate in any Fiscal Year or (iii) any other
Equipment solely to the extent that such Equipment is exchanged for credit against the purchase price of replacement or other Equipment or the
proceeds of such disposition are promptly (but, in any event, within one hundred eighty (180) days of such disposition) applied to the purchase
price of replacement or other Equipment;
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(b) dispositions (other than of (i) the Stock of any Subsidiary of any Credit Party or (ii) any Accounts of any Credit Party) not
otherwise permitted hereunder which are made for fair market value and the mandatory prepayment in the amount of the Net Proceeds of such
disposition is made if and to the extent required by Section 1.8 ; provided , that (i) at the time of any disposition, no Event of Default shall exist
or shall result from such disposition, (ii) not less than 75% of the aggregate sales price from such disposition shall be paid in cash, (iii) the
aggregate fair market value of all assets so sold by the Credit Parties and their Subsidiaries, together, shall not exceed in any Fiscal Year
$10,000,000 and (iv) in the event that Availability after giving effect to such disposition would be less than the greater of $13,750,000 and
12.5% of the Aggregate Revolving Loan Commitment, the Fixed Charge Coverage Ratio for the twelve (12) month period ending on the last
day of the fiscal month for which financial statements have most recently been delivered in accordance with Section 4.1(b) , calculated on a pro
forma basis after giving effect to such disposition, is at least 1.00 to 1.00;
(c) (i) dispositions of Cash Equivalents in the Ordinary Course of Business made to a Person that is not an Affiliate of any Credit
Party and (ii) conversions of Cash Equivalents into cash or other Cash Equivalents;
(d) dispositions of accounts receivable and related assets by (i) Real Alloy Germany to the Factoring Facility Purchaser in
accordance with the Factoring Facility Documents and (ii) Aleris Recycling (Swansea) Ltd. (to be known as Real Alloy UK Ltd. on or about
the Closing Date) in accordance with a financing arrangement permitted under Section 5.5(m) ;
(e) transfers of Property to a Credit Party by another Credit Party or by any Subsidiary of a Credit Party;
(f) the lease or sublease in the Ordinary Course of Business of Real Estate;
(g) the sale in the Ordinary Course of Business of Accounts pursuant to any Permitted Supplier Financing Arrangement;
(h) dispositions made for the purpose of consummating the Tyler Swap; and
(i) (i) Liens permitted under Section 5.1 (to the extent constituting a transfer of Property); (ii) mergers and amalgamations in
compliance with Section 5.3 ; and (iii) Restricted Payments made in compliance with Section 5.11 .
5.3 Consolidations, Mergers and Amalgamations . No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries
to merge, amalgamate, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except:
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(a) upon not less than five (5) Business Days prior written notice to Agent:
(i) any Subsidiary of a U.S. Borrower may merge with, or dissolve or liquidate into, a U.S. Borrower or a Wholly-Owned
Subsidiary of a U.S. Borrower which is a Domestic Subsidiary, provided that such U.S. Borrower or such Wholly-Owned Subsidiary which is a
Domestic Subsidiary shall be the continuing or surviving entity and all actions required to maintain perfected Liens on the Stock of the
surviving entity and other Collateral in favor of Agent shall have been completed;
(ii) any Subsidiary of the Canadian Borrower may merge or amalgamate with, or dissolve or liquidate into, the Canadian
Borrower or a Wholly-Owned Subsidiary of the Canadian Borrower which is a Canadian Subsidiary provided that the Canadian Borrower or
such Wholly-Owned Subsidiary which is a Canadian Subsidiary shall be the continuing or surviving entity and all actions required to maintain
perfected Liens on the Stock of the surviving entity and other Collateral in favor of Agent shall have been completed; and
(iii) any Foreign Subsidiary (other than a Canadian Subsidiary) may merge with or dissolve or liquidate into another Foreign
Subsidiary provided if a Foreign Subsidiary which is not an Excluded Foreign Subsidiary is a constituent entity in such merger, dissolution or
liquidation, a Foreign Subsidiary which is not an Excluded Foreign Subsidiary shall be the continuing or surviving entity; and
(b) on (or substantially contemporaneous with) the Closing Date:
(i) the Canadian Borrower may amalgamate with Real Alloy Canada Company, and following such amalgamation such
amalgamated entity shall be the Canadian Borrower for all purposes hereunder; provided that the Canadian Borrower shall, for United States
income tax purposes, be treated as a corporation within the meaning of Section 7701(a)(3) of the Code and Section 301.7701-2(b) of the
Treasury regulations;
(ii) SGH Escrow Corporation may merge with Real Alloy Holding provided that Real Alloy Holding shall be the continuing
and surviving entity; and
(iii) Mexico Acquiring S. de R.L. de C.V., a sociedad de responsabilidad limitada de capital variable organized under the
laws of the United Mexican States, may merge with Aleris Nuevo Leon S. de R.L. de C.V. a sociedad de responsabilidad limitada de capital
variable organized under the laws of the United Mexican States, provided that Aleris Nuevo Leon S. de R.L. de C.V. shall be the continuing
and surviving entity.
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5.4 Acquisitions; Loans and Investments . No Credit Party shall and no Credit Party shall suffer or permit any of its Subsidiaries to
(i) purchase or acquire, or make any commitment to purchase or acquire any Stock or Stock Equivalents, or any obligations or other securities
of, or any interest in, any Person, including the establishment or creation of a Subsidiary, (ii) make or commit to make any Acquisitions, or any
other acquisition of all or substantially all of the assets of another Person, or of any business or division of any Person, including by way of
merger, consolidation or other combination, or (iii) make, purchase or acquire or commit to make, purchase or acquire, any advance, loan,
extension of credit or capital contribution to or any other investment in, any Person including a Borrower, any Affiliate of a Borrower or any
Subsidiary of a Borrower (the items described in clauses (i) , (ii) and (iii) are referred to as “ Investments ”), except for:
(a) Investments in cash and Cash Equivalents;
(b) Investments consisting of (i) capital contributions by Holdings in then existing Credit Parties, (ii) extensions of credit or capital
contributions by any U.S. Credit Party (other than Holdings) to or in any other then existing U.S. Credit Party (other than Holdings),
(iii) extensions of credit or capital contributions by any Canadian Credit Party to or in any other then existing Canadian Credit Party,
(iv) extensions of credit or capital contributions by a U.S. Borrower or any other U.S. Credit Party (other than Holdings) to or in any then
existing U.S. Subsidiaries of a U.S. Borrower which are not Credit Parties not to exceed $500,000 in the aggregate at any time outstanding for
all such extensions of credit and capital contributions, (v) extensions of credit or capital contributions by the Canadian Borrower or any other
Canadian Credit Party to or in any then existing Canadian Subsidiaries of the Canadian Borrower which are not Credit Parties not to exceed
$500,000 in the aggregate at any time outstanding for all such extensions of credit and capital contributions, (vi) so long as (A) no Default or
Event of Default shall have occurred and be continuing or results therefrom, (B) Availability after giving effect to such Investment would not
be less than the greater of $20,000,000 and 18% of the Aggregate Revolving Loan Commitment and (C) the Fixed Charge Coverage Ratio for
the twelve (12) month period ending on the last day of the fiscal month for which financial statements have most recently been delivered in
accordance with Section 4.1(b) , calculated without giving effect to such Investment, is at least 1.00 to 1.00, extensions of credit or capital
contributions by a Credit Party (other than Holdings) to or in Foreign Subsidiaries of Holdings (other than any Canadian Subsidiary) not to
exceed $12,000,000 in the aggregate at any time outstanding for all such extensions of credit and capital contributions, (vii) so long as (A) no
Default or Event of Default shall have occurred and be continuing or results therefrom and (B) Availability after giving effect to such
Investment would not be less than the greater of $20,000,000 and 18% of the Aggregate Revolving Loan Commitment, extensions of credit or
capital contributions by a U.S. Credit Party (other than Holdings) to or in a Canadian Subsidiary of Holdings not to exceed $5,000,000 in the
aggregate at any time outstanding for all such extensions of credit and capital contributions; provided , that (x) if any Person executes and
delivers to any Credit Party a note (collectively, the “ Intercompany Notes ”) to evidence any Investments described in the foregoing clauses
(i) through (vii) , that Intercompany Note shall be pledged and delivered to Agent pursuant to the U.S. Revolving Guaranty and Security
Agreement or the Canadian Revolving Guarantee and Security Agreement, as
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applicable, as additional collateral security for the Obligations; (y) each Credit Party shall accurately record all intercompany transactions on its
books and records; and (z) at the time any such intercompany loan or advance is made by any Credit Party to any other Person permitted
pursuant to the foregoing clauses (i) through (vii) and after giving effect thereto, each such Credit Party shall be Solvent; (viii) extensions of
credit or capital contributions by a Subsidiary of a U.S. Borrower which is not a Credit Party to or in another then existing Subsidiary of a U.S.
Borrower which is not a Credit Party, or (ix) extensions of credit or capital contributions by a Subsidiary of the Canadian Borrower which is
not a Credit Party to or in another then existing Subsidiary of the Canadian Borrower which is not a Credit Party;
(c) Investments received as the non-cash portion of consideration received in connection with transactions permitted pursuant to
Section 5.2(b) ;
(d) Investments acquired in connection with the settlement of delinquent Accounts in the Ordinary Course of Business or in
connection with the bankruptcy or reorganization of suppliers or customers;
(e) Investments existing on the Closing Date and set forth in Schedule 5.4 ;
(f) loans or advances to employees permitted under Section 5.6 ;
(g) Investments arising under Rate Contracts and Commodity Hedging Agreements permitted under Section 5.9(b) ;
(h) the Closing Date Acquisition and any Permitted Acquisitions; and
(i) other Investments not described above in an aggregate amount not to exceed $3,000,000 at any time.
5.5 Limitation on Indebtedness . No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, create, incur,
assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness consisting of Contingent Obligations (to the extent the same constitute Indebtedness) permitted pursuant to
Section 5.9 ;
(c) Indebtedness existing on the Closing Date and set forth in Schedule 5.5 including Permitted Refinancings thereof;
(d) Indebtedness not to exceed an aggregate principal amount at any time outstanding of the greater of (i) 3.0% of Total Assets and
(ii) $25,000,000, consisting of Capital Lease Obligations or secured by Liens permitted by Section 5.1(h) and Permitted Refinancings thereof;
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(e) unsecured intercompany Indebtedness permitted pursuant to Section 5.4(b) ;
(f) Indebtedness (i) existing on the Closing Date under the Indenture Documents in an original aggregate principal amount not to
exceed $320,000,000, (ii) consisting of Notes Pari Passu Lien Obligations to the extent permitted to be incurred after the Closing Date pursuant
to the Indenture Documents in effect as of the Closing Date and (iii) incurred in connection with any financing from any lender in respect of the
Notes Pari Passu Lien Obligations under Section 364 of the Bankruptcy Code to the extent permitted pursuant to the Intercreditor Agreement,
and, in the case of clauses (i) and (ii) , Permitted Refinancings thereof in accordance with the Intercreditor Agreement;
(g) Indebtedness under the Factoring Facility Documents and Permitted Refinancings thereof;
(h) Indebtedness owed to any Person providing workers’ compensation, health, disability or other employee benefits (including
contractual and statutory benefits) or property, casualty, liability or credit insurance, pursuant to reimbursement or indemnification obligations
to such Person, in each case incurred in the Ordinary Course of Business; provided that upon the incurrence of Indebtedness with respect to any
such reimbursement obligations, such obligations are reimbursed not later than thirty (30) days following such incurrence;
(i) Indebtedness of a Subsidiary of a Credit Party acquired pursuant to a Permitted Acquisition (or Indebtedness of a Target assumed
at the time of a Permitted Acquisition of such Target); provided that (i) such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition and (ii) the aggregate principal amount of all Indebtedness permitted by this
Section 5.5(i) shall not at any time outstanding exceed $5,000,000;
(j) Indebtedness incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds and other
similar obligations not to exceed $3,000,000 in the aggregate at any time outstanding;
(k) Indebtedness arising from the honoring by a bank or other depository institution of a check, draft or similar instrument drawn
against insufficient funds in the Ordinary Course of Business; provided that such Indebtedness is extinguished within five (5) Business Days of
its incurrence;
(l) Indebtedness consisting of the financing of insurance premiums in the Ordinary Course of Business; provided that the aggregate
principal amount thereof does not exceed the annual premium amount and shall be secured only by Liens permitted under Section 5.1(x) ;
(m) Indebtedness of Foreign Subsidiaries (other than Real Alloy Germany) of Credit Parties that are not Credit Parties in an
aggregate amount not to exceed $11,000,000 at any time outstanding and Permitted Refinancings thereof (collectively, “ Specified Foreign
Subsidiary Indebtedness ”); and
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(n) other unsecured Indebtedness owing to Persons that are not Affiliates of the Credit Parties in an aggregate principal amount not
to exceed the greater of (i) 1.0% of Total Assets and (ii) $10,000,000, in each case at any time outstanding.
5.6 Employee Loans and Transactions with Affiliates . No Credit Party shall, and no Credit Party shall suffer or permit any of its
Subsidiaries to, enter into any transaction with any Affiliate of a Borrower or of any such Subsidiary, except:
(a) as expressly permitted by this Agreement, including Investments and Restricted Payments expressly permitted by this
Agreement;
(b) in the Ordinary Course of Business and pursuant to the reasonable requirements of the business of such Credit Party or such
Subsidiary upon fair and reasonable terms no less favorable to such Credit Party or such Subsidiary than would be obtained in a comparable
arm’s length transaction with a Person not an Affiliate of a Borrower or such Subsidiary and which are disclosed in writing to Agent;
(c) loans or advances to employees of Credit Parties for travel, entertainment and relocation expenses and other ordinary business
purposes in the Ordinary Course of Business not to exceed $500,000 in the aggregate outstanding at any time;
(d) non-cash loans or advances made by Holdings to employees of Credit Parties that are simultaneously used by such Persons to
purchase Stock or Stock Equivalents of Holdings;
(e) the issuance of Stock or other payments, awards or grants in cash, Stock or otherwise pursuant to or the funding of, employment
arrangements, Stock option and Stock ownership plans or similar employee benefit plans, in each case in the Ordinary Course of Business and
approved by the board of directors of the applicable Credit Party or Subsidiary thereof, as appropriate, in good faith;
(f) employment agreements entered into in the Ordinary Course of Business, which agreements shall provide for the payment of
reasonable compensation for actual services rendered and be approved by the board of directors of the applicable Credit Party or Subsidiary
thereof, as appropriate, in good faith; and
(g) the Related Transactions.
All such transactions existing as of the Closing Date are described in Schedule 5.6 .
5.7 Management Fees and Compensation . No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, pay any
management, consulting or similar fees to any Affiliate of any Credit Party or to any officer, director or employee of any Credit Party or any
Affiliate of any Credit Party or pay or reimburse the Sponsor or any of its Affiliates (other than a Credit Party) for any costs, expenses and
similar items except:
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(a) payment of reasonable compensation to officers and employees for actual services rendered to the Credit Parties and their
Subsidiaries in the Ordinary Course of Business;
(b) payment of directors’ fees and reimbursement of actual out-of-pocket expenses incurred in connection with attending board of
director meetings not to exceed in the aggregate, with respect to all such items, $500,000 in any Fiscal Year of the Borrowers;
(c) payment to the Sponsor of reasonable and ordinary out-of-pocket overhead, insurance and other similar expenses incurred by the
Sponsor to the extent such expenses are allocated to the Credit Parties and their Subsidiaries in the Ordinary Course of Business and pursuant
to methodology reasonably acceptable to Agent; and
(d) payment on the Closing Date of transaction expenses to the Sponsor not to exceed $37,000,000 in the aggregate.
5.8 Margin Stock; Use of Proceeds . No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, use any
portion of the Loan or Letter of Credit proceeds, directly or indirectly, to purchase or carry Margin Stock or repay or otherwise refinance
Indebtedness of any Credit Party or others incurred to purchase or carry Margin Stock, or otherwise in any manner which is in contravention of
any Requirement of Law or in violation of this Agreement.
5.9 Contingent Obligations . No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, create, incur,
assume or suffer to exist any Contingent Obligations except in respect of the Obligations and except:
(a) endorsements for collection or deposit in the Ordinary Course of Business;
(b) Rate Contracts and Commodity Hedging Agreements entered into in the Ordinary Course of Business for bona fide hedging
purposes and not for speculation;
(c) Contingent Obligations of the Credit Parties and their Subsidiaries existing as of the Closing Date and listed on Schedule 5.9 ,
including extension and renewals thereof which do not increase the amount of such Contingent Obligations or impose materially more
restrictive or adverse terms on the Credit Parties or their Subsidiaries as compared to the terms of the Contingent Obligation being renewed or
extended;
(d) Contingent Obligations arising under indemnity agreements to title insurers to cause such title insurers to issue to Agent title
insurance policies;
(e) Contingent Obligations arising with respect to customary indemnification, adjustment or purchase or acquisition price or similar
obligations in favor of (i) sellers in connection with Acquisitions permitted hereunder (including the Closing Date Acquisition) and
(ii) purchasers in connection with dispositions permitted under Sections 5.2(b) and 5.2(g) ;
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(f) Contingent Obligations arising under Letters of Credit;
(g) Contingent Obligations arising under letters of credit issued in the Ordinary Course of Business for the account of any Credit
Party; provided that (i) such letters of credit may be issued only if a Letter of Credit is not available to be Issued by an L/C Issuer under this
Agreement, (ii) such Contingent Obligations shall be secured only by the Liens permitted pursuant to Section 5.1(cc) , (iii) no Event of Default
has occurred and is continuing or would result from the issuance of any such letter of credit and (iv) the aggregate amount of such Contingent
Obligations in respect of all such letters of credit does not exceed $4,000,000 at any time outstanding;
(h) Contingent Obligations owed by any of the Foreign Subsidiaries with respect to the Existing Letters of Credit;
(i) Contingent Obligations arising under guaranties made in the Ordinary Course of Business of obligations of any Credit Party
(other than a Holding Company), which obligations are otherwise permitted hereunder; provided that if such obligation is subordinated to the
Obligations, such guaranty shall be subordinated to the same extent;
(j) Contingent Obligations arising under the Indenture Documents (including, for the avoidance of doubt, the Collateral Trust
Hedging Obligations) or the Factoring Facility Documents, in each case to the extent such Indebtedness or obligations are permitted to be
incurred in accordance with Section 5.5 ;
(k) intercompany guarantees, support agreements, keep-well agreements and other similar Contingent Obligations made, entered
into or incurred in connection with a transaction subject to the Commodity Exchange Act by any Credit Party or any Subsidiary of a Credit
Party that is an eligible contract participant (as defined in the Commodity Exchange Act) for the benefit of any other Credit Party or any of its
Subsidiaries by virtue of such Person’s failure for any reason to constitute an eligible contract participant; and
(l) other Contingent Obligations not exceeding $1,000,000 in the aggregate at any time outstanding.
5.10 Compliance with ERISA, Pension and Benefits Plans .
(a) No ERISA Affiliate shall cause or suffer to exist (a) any event that could result in the imposition of a Lien on any asset of a
Credit Party or a Subsidiary of a Credit Party with respect to any Title IV Plan or Multiemployer Plan or (b) any other ERISA Event, that
would, in the aggregate, have a Material Adverse Effect. No Credit Party shall cause or suffer to exist any event that could result in the
imposition of a Lien with respect to any Benefit Plan.
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(b) No Credit Party shall establish or contribute to any Canadian Defined Benefit Pension Plan.
5.11 Restricted Payments . No Credit Party shall, and no Credit Party shall suffer or permit any of its Subsidiaries to, (i) declare or make
any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any Stock or Stock
Equivalent or (ii) purchase, redeem or otherwise acquire for value any Stock or Stock Equivalent now or hereafter outstanding (the items
described in clauses (i) and (ii) above are referred to as “ Restricted Payments ”); except that:
(a) any U.S. Subsidiary may declare and pay dividends to any U.S. Credit Party;
(b) any Canadian Subsidiary may declare and pay dividends or make trust distributions to any Credit Party;
(c) Holdings may declare and make dividend payments or other distributions payable solely in its Stock or Stock Equivalents;
(d) each Subsidiary of Real Alloy Acquisition may make distributions to Real Alloy Acquisition and Real Alloy Acquisition may
make distributions to Holdings which are immediately used by Holdings to redeem from officers, directors, employees and consultants Stock
and Stock Equivalents of Holdings or the Sponsor provided all of the following conditions are satisfied:
(i) each of the Permitted Payment Conditions; and
(ii) the aggregate Restricted Payments permitted (x) in any Fiscal Year of the Borrowers shall not exceed $1,000,000 and
(y) during the term of this Agreement shall not exceed $5,000,000;
(e) for any taxable period in which any Credit Party and/or any of its Subsidiaries is a member of a consolidated, combined, unitary
or similar type income tax group of which the Sponsor is the common parent (a “ Tax Group ”), the Borrowers and their Subsidiaries may make
distributions to Real Alloy Acquisition, Real Alloy Acquisition may make distributions to Holdings, and Holdings may make distributions to
the Sponsor to permit the payment of federal, state, local and foreign income Taxes then due and payable, including required estimated
payments, after giving effect to the application by the Sponsor of a net operating loss carryforward in such Fiscal Year, if any, and franchise
Taxes and other similar licensing expenses incurred in the Ordinary Course of Business; provided that the amount of such distribution shall not
be greater than the amount of such Taxes or expenses that would have been due and payable by the Credit Parties and their relevant
Subsidiaries had the Borrowers not filed a consolidated, combined, unitary or similar type return as part of a Tax Group;
(f) on and after the delivery of the audited financial statement pursuant to Section 4.1(a) for the Fiscal Year ending December 31,
2015, each Subsidiary of Real Alloy Acquisition may make distributions to Real Alloy Acquisition and Real
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Alloy Acquisition may make distributions to Holdings which are immediately used by Holdings to make distributions consisting of the
payment of dividends to the holders of Stock of Holdings provided all of the following conditions are satisfied:
(i) each of the Permitted Payment Conditions; and
(ii) the aggregate Restricted Payments permitted in any Fiscal Year of the Borrowers shall not exceed the sum of (x) the
lesser of (1) $6,000,000 and (2) 50% of the net income (for the avoidance of doubt, such net income having been reduced by the amount of any
Specified NOL Dividends paid or payable in such Fiscal Year) of the Credit Parties on a consolidated basis determined in accordance with
GAAP (adjusted for non-recurring transaction costs previously disclosed to, and approved by, Agent and non-cash deferred financing costs) for
the most recently ended Fiscal Year for which audited financial statements have been delivered pursuant to Section 4.1(a) and (y) the aggregate
amount that each Subsidiary of Real Alloy Acquisition would have otherwise paid as a member of a Tax Group in accordance with
Section 5.11(e) but for the application by the Sponsor of a net operating loss carryforward in such Fiscal Year, provided that such Restricted
Payments shall not exceed $3,000,000 in any Fiscal Year (the Restricted Payments referred to in this clause (y) , the “ Specified NOL
Dividends ”);
(g) Real Alloy Acquisition and Holdings may make Restricted Payments on the Closing Date in connection with the consummation
of the Closing Date Acquisition;
(h) each Subsidiary of Real Alloy Acquisition may declare and make Restricted Payments to Real Alloy Acquisition and Real Alloy
Acquisition may declare and make Restricted Payments to Holdings so that Holdings may, and Holdings shall be permitted to, make payments
permitted by Section 5.7 ; and
(i) any Subsidiary that is not a Credit Party may make distributions to Real Alloy Acquisition or any other Subsidiary of Real Alloy
Acquisition, provided that (i) such distributions are applied to the payment of principal or interest in respect of Indebtedness permitted pursuant
to Section 5.5 and (ii) such distributions are not funded with proceeds of Investments permitted under Sections 5.4(b)(vi) or 5.4(b)(vii) .
5.12 Change in Business . No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, engage in any line of business
different from those lines of business carried on by it on the Closing Date and any business reasonably complementary or ancillary thereto. No
Holding Company shall engage in any business activities or own any Property other than (i) ownership of the Stock and Stock Equivalents of
the Borrowers, (ii) activities and contractual rights incidental to maintenance of its corporate existence and (iii) performance of its obligations
under the Related Agreements to which it is a party.
5.13 Change in Structure . Except as expressly permitted under Section 5.3 , no Credit Party shall, and no Credit Party shall permit any of
its Subsidiaries to, make any material changes in its equity capital structure, issue any Stock or Stock Equivalents or amend any of its
Organization Documents in any material respect and, in each case, in any respect adverse to Agent or Lenders.
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5.14 Changes in Accounting, Name or Jurisdiction of Organization . No Credit Party shall, and no Credit Party shall suffer or permit any
of its Subsidiaries to, (i) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (ii) change
the Fiscal Year or method for determining Fiscal Quarters of any Credit Party or of any consolidated Subsidiary of any Credit Party, (iii) except
as set forth on Schedule 5.14 to occur on or about the Closing Date immediately after the consummation of the Related Transactions, change its
name as it appears in official filings in its jurisdiction of organization or (iv) change its jurisdiction of organization or (v) change (x) its chief
executive office or domicile (within the meaning of the Civil Code of Quebec), or (y) warehouses or locations at which Collateral is held or
stored or the location of its material records concerning the Collateral, in the case of clauses (iii) , (iv) and (v) , without at least twenty
(20) days’ prior written notice to Agent and the acknowledgement of Agent that all actions required by Agent, including those to continue the
perfection of its Liens, have been completed.
5.15 Amendments to Related Agreements . No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries, to (i) amend,
supplement, waive or otherwise modify any provision of, any Related Agreement (other than (A) the Loan Documents in accordance with the
terms applicable thereto, (B) the Indenture Documents to the extent permitted by the Intercreditor Agreement and (C) the Factoring Facility
Documents and the Closing Date Equity Transaction Documents in a manner that is not adverse to Agent or Lenders or which would not
reasonably be expected to have a Material Adverse Effect), or (ii) take or fail to take any action under any Related Agreement that would
reasonably be expected to have a Material Adverse Effect.
5.16 No Negative Pledges .
(a) No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the ability of any Credit Party or Subsidiary to
pay dividends or make any other distribution on any of such Credit Party’s or Subsidiary’s Stock or Stock Equivalents or to pay fees, including
management fees, or make other payments and distributions to a Borrower or any other Credit Party except any restrictions contained in the
Loan Documents, the Indenture Documents or the Factoring Facility Documents. No Credit Party shall, and no Credit Party shall permit any of
its Subsidiaries to, directly or indirectly, enter into, assume or become subject to any Contractual Obligation prohibiting or otherwise restricting
the existence of any Lien upon any of its assets in favor of Agent, whether now owned or hereafter acquired except:
(i) under the Loan Documents;
(ii) under the Indenture Documents;
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(iii) under the Factoring Facility Documents;
(iv) in connection with any document or instrument governing Liens permitted pursuant to Sections 5.1(h) , 5.1(i) , 5.1(v) ,
5.1(w) and 5.1(y) ; provided that any such restriction contained therein relates only to the asset or assets subject to such permitted Liens;
(v) customary restrictions and conditions contained in any agreement relating to the sale, assignment, lease, conveyance,
transfer or other disposition of any asset permitted under Section 5.2 pending the consummation of such sale, assignment, lease, conveyance,
transfer or other disposition;
(vi) restrictions binding upon a Person acquired by a Credit Party (other than any Holding Company), which restrictions
were in existence at the time of such Acquisition (but not created in contemplation or anticipation thereof or to provide all or any portion of the
funds or credit support utilized to consummate such Acquisition), which restrictions are not applicable to any Person, or the Property of any
Person, other than the Person and its Subsidiaries, or the Property of the Person and its Subsidiaries, so acquired;
(vii) customary restrictions in joint venture, partnership and other similar agreements applicable to joint ventures or
partnerships, as the case may be, permitted under Section 5.4 and applicable solely to such joint venture or partnership, as the case may be,
entered into in the Ordinary Course of Business;
(viii) restrictions imposed by any document or instrument relating to Indebtedness incurred by a Foreign Subsidiary pursuant
to Section 5.5(m) provided that any such restriction contained therein is limited to such Foreign Subsidiary’s assets pledged as security in
connection with such Indebtedness; and
(ix) pursuant to restrictions existing solely under or by reason of applicable Requirements of Law.
(b) No Credit Party shall issue any Stock or Stock Equivalents (i) if such issuance would result in an Event of Default under
Section 7.1(k) and (ii) unless such Stock and Stock Equivalents are pledged to Agent, for the benefit of the Secured Parties, as security for the
Obligations, on substantially the same terms and conditions as the Stock and Stock Equivalents of such Credit Party are pledged to Agent.
5.17 OFAC; Patriot Act; Anti-Money Laundering . No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to fail to
comply with the laws, regulations and executive orders referred to in Sections 3.30 and 3.31 .
5.18 Sale-Leasebacks . No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, engage in a sale leaseback,
synthetic lease or similar transaction involving any of its assets.
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5.19 Hazardous Materials . No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, cause or suffer to exist any
Release of any Hazardous Material at, to or from any Real Estate that violates any Environmental Law, could reasonably be expected to form
the basis for any Material Environmental Liabilities or otherwise have a material adverse effect on the value or marketability of any Real Estate
(whether or not owned by any Credit Party or any Subsidiary of any Credit Party).
5.20 Prepayments of Other Indebtedness . No Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay
any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than:
(a) the Obligations;
(b) Indebtedness secured by a Permitted Lien if the asset securing such Indebtedness has been sold or otherwise disposed of in a
transaction permitted hereunder; provided that any payment or prepayment of any Notes Pari Passu Lien Obligations pursuant to this clause
(b) shall be limited to and made solely with the Net Proceeds received by any Credit Party from the sale or other disposition of Notes Priority
Collateral and shall be subject to the terms of the Intercreditor Agreement;
(c) a Permitted Refinancing of Indebtedness permitted under Section 5.5(c) , (d) , (f) , (g) or (m) ;
(d) a voluntary prepayment of the Notes Pari Passu Lien Obligations so long as:
(i) each of the Permitted Payment Conditions is satisfied; and
(ii) the aggregate amount of all such prepayments by the Credit Parties pursuant to this clause (d) does not exceed
$25,000,000 during any Fiscal Year; and
(e) prepayment of intercompany Indebtedness to Credit Parties.
ARTICLE VI.
FINANCIAL COVENANTS
Each Credit Party covenants and agrees that, so long as any Lender shall have any Commitment hereunder, or any Loan or other
Obligation (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) shall remain unpaid
or unsatisfied:
6.1 Fixed Charge Coverage Ratio . If a Trigger Event has occurred and is continuing, the Credit Parties shall not permit the Fixed Charge
Coverage Ratio for the twelve fiscal month period ending on the last day of the most recent fiscal month prior to the applicable Trigger Date
for which a Compliance Certificate has been or is required to be delivered pursuant to Section 4.2(b) and for any twelve fiscal month period
ending during a Trigger Period to be less than 1.00 to 1.00.
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“ Fixed Charge Coverage Ratio ” shall be calculated in the manner set forth in Exhibit 4.2(b) .
ARTICLE VII.
EVENTS OF DEFAULT
7.1 Events of Default . Any of the following shall constitute an “ Event of Default ”:
(a) Non-Payment . Any Credit Party fails (i) to pay when and as required to be paid herein, any amount of principal of, or interest
on, any Loan, including after maturity of the Loans, or to pay any L/C Reimbursement Obligation or (ii) to pay within three (3) Business Days
after the same shall become due, any fee or any other amount payable hereunder or pursuant to any other Loan Document;
(b) Representation or Warranty . (i) Any representation, warranty or certification by or on behalf of any Credit Party or any of its
Subsidiaries made or deemed made herein, in any other Loan Document, or which is contained in any certificate, document or financial or
other statement by any such Person, or their respective Responsible Officers, furnished at any time under this Agreement, or in or under any
other Loan Document, shall prove to have been incorrect in any material respect (without duplication of other materiality qualifiers contained
therein) on or as of the date made or deemed made or (ii) any information contained in any Borrowing Base Certificate is untrue or incorrect in
any respect (other than (A) inadvertent, immaterial errors not exceeding $750,000 in the aggregate in any Borrowing Base Certificate,
(B) errors understating the Borrowing Base and (C) inadvertent errors occurring when Availability continues to exceed $22,000,000 after
giving effect to the correction of such errors (provided that, an Event of Default shall be deemed to have occurred regardless of Availability
after the occurrence of any such error, if errors which cause the Borrowing Base to be overstated by an amount greater than $2,000,000 occur
three or more times during the term of this Agreement));
(c) Specific Defaults . Any Credit Party fails to perform or observe any term, covenant or agreement contained in any of Sections
4.1 , 4.2(a) , 4.2(b) , 4.2(d) , 4.3(a) , 4.6 , 4.9 , 4.10 , 4.11 , 4.15 or 9.10(b) or Article V or VI or the Fee Letter;
(d) Other Defaults . Any Credit Party or Subsidiary of any Credit Party fails to perform or observe any other term, covenant or
agreement contained in this Agreement or any other Loan Document, and such default shall continue unremedied for a period of thirty
(30) days after the earlier to occur of (i) the date upon which a Responsible Officer of any Credit Party becomes aware of such default and
(ii) the date upon which written notice thereof is given to the Borrower Representative by Agent or Required Lenders;
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(e) Cross-Default . (i) Any Credit Party or any Subsidiary of any Credit Party (A) fails to make any payment in respect of any
Indebtedness (other than the Obligations) or Contingent Obligation (other than the Obligations) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000 when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise)
and such failure continues after the applicable grace or notice period, if any, specified in the document relating thereto on the date of such
failure; or (B) fails to perform or observe any other condition or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent Obligation (other than Contingent Obligations owing by one Credit
Party with respect to the obligations of another Credit Party permitted hereunder or earnouts permitted hereunder), if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to be declared to be due and
payable prior to its stated maturity (without regard to any subordination terms with respect thereto), or such Contingent Obligation to become
payable or cash collateral in respect thereof to be demanded, (ii) the occurrence and continuation of any event of default under the Indenture
Documents, (iii) the occurrence and continuation of any event of default under the Factoring Facility Documents, or (iv) the occurrence and
continuance of any event of default under the Closing Date Equity Transaction Documents;
(f) Insolvency; Voluntary Proceedings . A Borrower, individually, ceases or fails, or the Credit Parties and their Subsidiaries on a
consolidated basis, cease or fail, to be Solvent, or any Credit Party or any Subsidiary of any Credit Party: (i) generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) except as expressly permitted under Section 5.3 , voluntarily ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to effectuate or authorize any of the foregoing;
(g) Involuntary Proceedings . (i) Any involuntary Insolvency Proceeding is commenced or filed against any Credit Party or any
Subsidiary of any Credit Party, or any writ, judgment, warrant of attachment, execution or similar process, is issued or levied against a
substantial part of such Person’s Property and any such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or fully bonded within sixty (60) days after commencement, filing or
levy; (ii) any Credit Party or Subsidiary of any Credit Party admits the material allegations of a petition against it in any Insolvency Proceeding,
or an order for relief (or similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) any Credit Party or any Subsidiary
of any Credit Party acquiesces in the appointment of a receiver, receiver and manager, statutory manager, administrator, trustee, custodian,
conservator, liquidator (whether provisional or otherwise), sequestrator, mortgagee in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its Property or business;
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(h) Monetary Judgments . One or more judgments, non-interlocutory orders, decrees or arbitration awards shall be entered against
any one or more of the Credit Parties or any of their respective Subsidiaries involving in the aggregate a liability of $3,000,000 or more
(excluding amounts covered by insurance to the extent the relevant independent third party insurer has not denied coverage therefor), and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty (30) days after the entry thereof;
(i) Non-Monetary Judgments . One or more non-monetary judgments, orders or decrees shall be rendered against any one or more
of the Credit Parties or any of their respective Subsidiaries which has or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, and there shall be any period of fifteen (15) consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;
(j) Collateral . Any material provision of any Loan Document shall for any reason cease to be valid and binding on or enforceable
against any Credit Party or any Subsidiary of any Credit Party party thereto or any Credit Party or any Subsidiary of any Credit Party shall so
state in writing or bring an action to limit its obligations or liabilities thereunder; or any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in the Collateral purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first priority security interest subject only to Permitted Liens;
(k) Ownership . (i) the Sponsor at any time ceases to own at least one hundred percent (100%) of the issued and outstanding Stock
of Holdings owned by it on the Closing Date (as the same may be adjusted for any combination, recapitalization or reclassification into a
greater or smaller number of shares, interests or other unit of equity security); (ii) the Sponsor at any time fails to own beneficially, directly or
indirectly, at least fifty-one percent (51%) of the issued and outstanding voting Stock of Holdings or, in any event, Stock representing voting
control of the Borrowers; (iii) Holdings ceases to own one hundred percent (100%) of the issued and outstanding Stock and Stock Equivalents
of Real Alloy Acquisition; (iv) Real Alloy Acquisition ceases to own one hundred percent (100%) of the issued and outstanding Stock and
Stock Equivalents of the Borrowers; (v) except as otherwise provided in this Agreement, any Borrower ceases to own one hundred percent
(100%) (or, solely with respect to IMSAMET of Arizona, seventy percent (70%)) of the issued and outstanding Stock and Stock Equivalents of
any of its Subsidiaries, in each instance in clauses (i) , (ii) , (iii) , (iv) and (v) , free and clear of all Liens, rights, options, warrants or other
similar agreements or understandings, other than (A) Liens in favor of Agent, for the benefit of the Secured Parties or (B) Liens in favor of the
Notes Collateral Trustee granted under the Indenture Documents;
(l) Invalidity of Intercreditor Agreement . Any provision of the Intercreditor Agreement, shall for any reason be revoked or
invalidated by any Person, or otherwise cease to be in full force and effect, or any Person shall contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations, for any reason shall not have the
priority contemplated by this Agreement, the Intercreditor Agreement or such subordination provisions, as applicable; or
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(m) Proceeds under Purchase Agreement. Any indemnification payment by the Seller after the Closing Date paid to a Person other
than a Credit Party (other than amounts applied by such Person for the purpose of (i) replacing, repairing or restoring any Properties of a Credit
Party, (ii) payment of (or reimbursement of payments made for) claims against a Credit Party and settlements thereof to third Persons not an
Affiliate of a Credit Party, or (iii) otherwise covering any out-of-pocket expenses incurred by such Person in obtaining such indemnification
payment) shall not have been contributed to a Credit Party within five (5) Business Days of receipt thereof.
7.2 Remedies . Upon the occurrence and during the continuance of any Event of Default, Agent may, and shall at the request of the
Required Lenders:
(a) declare all or any portion of the Commitment of each Lender to make Loans or of the L/C Issuer to Issue Letters of Credit to be
suspended or terminated, whereupon all or such portion of such Commitment shall forthwith be suspended or terminated;
(b) declare all or any portion of the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable; without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly waived by each Credit Party; and/or
(c) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of any event specified in Section 7.1(f) or 7.1(g) above (in the case of clause (i) of Section 7.1(g)
upon the expiration of the sixty (60) day period mentioned therein), the obligation of each Lender to make Loans and the obligation of the L/C
Issuer to Issue Letters of Credit shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable without further act of Agent, any Lender or the L/C Issuer.
7.3 Rights Not Exclusive . The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive
of any other rights, powers, privileges or remedies provided by law or in equity, or under any other instrument, document or agreement now
existing or hereafter arising.
7.4 Cash Collateral for Letters of Credit . If an Event of Default has occurred and is continuing, this Agreement (or the Aggregate
Revolving Loan Commitment) shall be terminated for any reason or if otherwise required by the terms hereof, Agent may, and upon request of
Required Lenders, shall, demand (which demand shall be deemed to have been delivered automatically upon any acceleration of the Loans and
other obligations hereunder pursuant to Section 7.2 ), and the U.S. Borrowers (with respect to L/C
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Reimbursement Obligations for U.S. Letters of Credit) and the Canadian Borrower (with respect to L/C Reimbursement Obligations for
Canadian Letters of Credit) shall thereupon deliver to Agent, to be held for the benefit of the L/C Issuer, Agent and the Lenders entitled thereto,
an amount of cash equal to 103% of the U.S. Dollar Equivalent of the amount of L/C Reimbursement Obligations as additional collateral
security for such Obligations. Agent may at any time apply any or all of such cash and cash collateral to the payment of any or all of the Credit
Parties’ Obligations; provided that such cash collateral provided by the Canadian Borrower may only be used to repay Canadian Obligations.
The remaining balance of the cash collateral will be returned to the Borrowers when all Letters of Credit have been terminated or discharged,
all Commitments have been terminated and all Obligations have been paid in full in cash.
ARTICLE VIII.
THE AGENT
8.1 Appointment and Duties .
(a) Appointment of Agent . Each Lender and each L/C Issuer hereby appoints GE Capital (together with any successor Agent
pursuant to Section 8.9 ) as Agent hereunder and authorizes Agent to (i) execute and deliver the Loan Documents and accept delivery thereof
on its behalf from any Credit Party, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as
are expressly delegated to Agent under such Loan Documents and (iii) exercise such powers as are incidental thereto.
(b) Duties as Collateral and Disbursing Agent . Without limiting the generality of clause (a) above, Agent shall have the sole and
exclusive right and authority (to the exclusion of the Lenders and L/C Issuers), and is hereby authorized, to (i) act as the disbursing and
collecting agent for the Lenders and the L/C Issuers with respect to all payments and collections arising in connection with the Loan
Documents (including in any proceeding described in Section 7.1(f) or 7.1(g) or any other bankruptcy, insolvency or similar proceeding), and
each Person making any payment in connection with any Loan Document to any Secured Party is hereby authorized to make such payment to
Agent, (ii) file and prove claims and file other documents necessary or desirable to allow the claims of the Secured Parties with respect to any
Obligation in any proceeding described in Section 7.1(f) or 7.1(g) or any other bankruptcy, insolvency or similar proceeding (but not to vote,
consent or otherwise act on behalf of such Person), (iii) act as collateral agent for each Secured Party for purposes of the perfection of all Liens
created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such
other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Loan
Documents, (vi) except as may be otherwise specified in any Loan Document, exercise all remedies given to Agent and the other Secured
Parties with respect to the Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise and (vii) execute any
amendment, consent or waiver under the Loan Documents on behalf of any Lender that has consented in writing to such amendment, consent
or waiver; provided , however , that Agent hereby appoints, authorizes and directs
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each Lender and L/C Issuer to act as collateral sub-agent for Agent, the Lenders and the L/C Issuers for purposes of the perfection of Liens
with respect to any deposit account maintained by a Credit Party with, and cash and Cash Equivalents held by, such Lender or L/C Issuer, and
may further authorize and direct the Lenders and the L/C Issuers to take further actions as collateral sub-agents for purposes of enforcing such
Liens or otherwise to transfer the Collateral subject thereto to Agent, and each Lender and L/C Issuer hereby agrees to take such further actions
to the extent, and only to the extent, so authorized and directed.
(c) Limited Duties . Under the Loan Documents, Agent (i) is acting solely on behalf of the Secured Parties (except to the limited
extent provided in Section 1.4(b) with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of
the defined term “Agent”, the terms “agent”, “Agent” and “collateral agent” and similar terms in any Loan Document to refer to Agent, which
terms are used for title purposes only, (ii) is not assuming any obligation under any Loan Document other than as expressly set forth therein or
any role as agent, fiduciary or trustee of or for any Lender, L/C Issuer or any other Person and (iii) shall have no implied functions,
responsibilities, duties, obligations or other liabilities under any Loan Document, and each Secured Party, by accepting the benefits of the Loan
Documents, hereby waives and agrees not to assert any claim against Agent based on the roles, duties and legal relationships expressly
disclaimed in clauses (i) through (iii) above.
(d) Quebec Collateral .
For greater certainty, and without limiting the powers of Agent or any other Person acting as mandatary (agent) of the Agent, each of the
Secured Parties hereby irrevocably constitutes the Agent as the holder of an irrevocable power of attorney (fondé de pouvoir within the
meaning of Article 2692 of the Civil Code of Québec) in order to hold hypothecs and security granted by any Credit Party on Property pursuant
to the laws of the Province of Québec in order to secure obligations of any Credit Party under any bond, debenture or other title of
indebtedness, issued by any Credit Party, and hereby agrees that Agent, may act as the bondholder and mandatary (i.e., agent) with respect to
any shares, capital stock or other securities or any bond, debenture or similar title of indebtedness that may be issued by any Credit Party and
pledged in favor of Agent, for the benefit of the Secured Parties. The execution by the Agent, acting as fondé de pouvoir and mandatary, prior
to the Agreement of any deeds of hypothec or other security documents is hereby ratified and confirmed.
Notwithstanding the provisions of Section 32 of An Act respecting the special powers of legal persons (Québec), Agent may acquire and
be the holder of any bond or debenture issued by any Credit Party (i.e., the fondé de pouvoir may acquire and hold the first bond issued under
any deed of hypothec by any Credit Party).
The constitution of the Agent as fondé de pouvoir and as bondholder and mandatary set forth in the first paragraph of this clause (d), shall
be deemed to have been ratified and confirmed by each Person accepting an assignment of, a participation in or an arrangement in respect of,
all or any portion of any Secured Parties’ rights and
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obligations under the Agreement by the execution of an assignment, including an Assignment or other agreement pursuant to which it becomes
such assignee or participant, and by each successor Agent by the execution of an Assignment or other agreement, or by the compliance with
other formalities, as the case may be, pursuant to which it becomes a successor Agent under the Agreement.
The Agent acting as fondé de pouvoir shall have the same rights, powers, immunities, indemnities and exclusions from liability as are
prescribed in favour of Agent in the Agreement, which shall apply mutatis mutandis to the Agent acting as fondé de pouvoir.
(e) German Security .
The Agent shall (i) hold and administer any security created under the Collateral Documents and governed by German law which is
security assigned ( Sicherungseigentum/Sicherungsabtretung ) or otherwise transferred under a non-accessory security right (
nicht-akzessorische Sicherheit ) to it as trustee ( treuhänderisch ) for the benefit of the Secured Parties; and (ii) administer any security created
under the Collateral Documents and governed by German law which is pledged ( Verpfändung ) or otherwise transferred to any Secured Party
under an accessory security right ( akzessorische Sicherheit ) as agent.
Each Secured Party (other than the Agent) hereby authorizes the Agent (whether or not by or through employees or agents): (i) to
exercise such rights, remedies, powers and discretions as are specifically delegated to or conferred upon the Agent under the Collateral
Documents together with such powers and discretions as are reasonably incidental thereto, (ii) to take such action on its behalf as may from
time to time be authorized under or in accordance with the Collateral Documents; and (iii) to accept and enter into as its attorney ( Stellvertreter
) any pledge or other creation of any accessory security right granted in favour of such Secured Party in connection with the Loan Documents
under German law and to agree to and execute on its behalf as its attorney ( Stellvertreter ) any amendments, confirmations and/or alterations to
any Collateral Document governed by German law which creates a pledge or any other accessory security right ( akzessorische Sicherheit )
including the release or confirmation of release of such security.
Each of the Secured Parties (other than the Agent) hereby relieves the Agent from the restrictions pursuant to section 181 of the German
Civil Code ( Bürgerliches Gesetzbuch ) and similar restrictions applicable to it pursuant to any other applicable law, in each case to the extent
legally possible to such Secured Party. A Secured Party which is barred by its constitutional documents or by-laws from granting such
exemption shall notify the Agent accordingly.
Each Secured Party (other than the Agent) hereby ratifies and approves all acts and declarations previously done by the Agent on such
Secured Party’s behalf (including for the avoidance of doubt any declarations made by the Agent as representative without power of attorney (
Vertreter ohne Vertretungsmacht ) in relation to the creation of any pledge ( Pfandrecht ) on behalf and for the benefit of any Secured Party as
future pledgee or otherwise).
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Each of the Secured Parties (other than the Agent) hereby authorizes the Agent to (sub-)delegate any powers granted to it under this
Section 8.1 to any attorney it may elect in its discretion and to grant powers of attorney to any such attorney (including the exemption from
self-dealing and representing several persons (in particular from the restrictions of Section 181 of the German Civil Code ( Bürgerliches
Gesetzbuch ) (in each case to the extent legally possible)).
8.2 Binding Effect . Each Secured Party, by accepting the benefits of the Loan Documents, agrees that (i) any action taken by Agent or
the Required Lenders (or, if expressly required hereby, a greater proportion of the Lenders) in accordance with the provisions of the Loan
Documents, (ii) any action taken by Agent in reliance upon the instructions of Required Lenders (or, where so required, such greater
proportion) and (iii) the exercise by Agent or the Required Lenders (or, where so required, such greater proportion) of the powers set forth
herein or therein, together with such other powers as are incidental thereto, shall be authorized and binding upon all of the Secured Parties.
8.3 Use of Discretion .
(a) Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights
and powers expressly contemplated hereby or by the other Loan Documents that Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan
Documents); provided, that Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Agent to
liability or that is contrary to any Loan Document or applicable Requirement of Law.
(b) Agent shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not
be liable for the failure to disclose, any information relating to any Credit Party or its Affiliates that is communicated to or obtained by Agent
or any of its Affiliates in any capacity.
(c) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and
remedies hereunder and under the other Loan Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions
and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Agent in accordance with the
Loan Documents for the benefit of all the Lenders and the L/C Issuer; provided that the foregoing shall not prohibit (i) Agent from exercising
on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under the other Loan
Documents, (ii) each of the L/C Issuer and the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its
capacity as L/C Issuer or Swingline Lender, as the case may be) hereunder and under the other Loan Documents, (iii) any Lender from
exercising setoff rights in accordance with Section 9.11
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or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative
to any Credit Party under any bankruptcy or other debtor relief law; and provided further that if at any time there is no Person acting as Agent
hereunder and under the other Loan Documents, then (A) the Required Lenders shall have the rights otherwise ascribed to Agent pursuant to
Section 7.2 and (B) in addition to the matters set forth in clauses (ii) , (iii) and (iv) of the preceding proviso and subject to Section 9.11 , any
Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required
Lenders.
8.4 Delegation of Rights and Duties . Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers
and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any
trustee, co-agent, employee, attorney-in-fact and any other Person (including any Secured Party). Any such Person shall benefit from this
Article VIII to the extent provided by Agent.
8.5 Reliance and Liability .
(a) Agent may, without incurring any liability hereunder, (i) treat the payee of any Note as its holder until such Note has been
assigned in accordance with Section 9.9 , (ii) rely on the Register to the extent set forth in Section 1.4 , (iii) consult with any of its Related
Persons and, whether or not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts
engaged by, any Credit Party) and (iv) rely and act upon any document and information (including those transmitted by Electronic
Transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise
authenticated by the appropriate parties.
(b) None of Agent and its Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in
connection with any Loan Document, and each Secured Party, each Holding Company, each Borrower and each other Credit Party hereby
waive and shall not assert (and each of the Holding Companies and the Borrowers shall cause each other Credit Party to waive and agree not to
assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting primarily from the gross negligence or
willful misconduct of Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment by a court of
competent jurisdiction) in connection with the duties expressly set forth herein. Without limiting the foregoing, Agent and its Related Persons:
(i) shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of
the Required Lenders or for the actions or omissions of any of its Related Persons selected with reasonable care (other than employees, officers
and directors of Agent, when acting on behalf of Agent);
(ii) shall not be responsible to any Lender, L/C Issuer or other Person for the due execution, legality, validity, enforceability,
effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under
or in connection with, any Loan Document;
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(iii) makes no warranty or representation, and shall not be responsible, to any Lender, L/C Issuer or other Person for any
statement, document, information, representation or warranty made or furnished by or on behalf of any Credit Party or any Related Person of
any Credit Party in connection with any Loan Document or any transaction contemplated therein or any other document or information with
respect to any Credit Party, whether or not transmitted or (except for documents expressly required under any Loan Document to be transmitted
to the Lenders) omitted to be transmitted by Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature
or results of any due diligence performed by Agent in connection with the Loan Documents; and
(iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan
Document, whether any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of any Credit Party or as
to the existence or continuation or possible occurrence or continuation of any Default or Event of Default and shall not be deemed to have
notice or knowledge of such occurrence or continuation unless it has received a notice from the Borrower Representative, any Lender or L/C
Issuer describing such Default or Event of Default clearly labeled “notice of default” (in which case Agent shall promptly give notice of such
receipt to all Lenders);
and, for each of the items set forth in clauses (i) through (iv) above, each Lender, L/C Issuer, each Holding Company, each Borrower and
each other Credit Party hereby waives and agrees not to assert any right, claim or cause of action it might have against Agent based thereon.
(c) Each Lender and L/C Issuer (i) acknowledges that it has performed and will continue to perform its own diligence and has made
and will continue to make its own independent investigation of the operations, financial conditions and affairs of the Credit Parties and
(ii) agrees that is shall not rely on any audit or other report provided by Agent or its Related Persons (each, an “ Agent Report ”). Each Lender
and L/C Issuer further acknowledges that any Agent Report (i) is provided to the Lenders and L/C Issuers solely as a courtesy, without
consideration, and based upon the understanding that such Lender or L/C Issuer will not rely on such Agent Report, (ii) was prepared by Agent
or its Related Persons based upon information provided by the Credit Parties solely for Agent’s own internal use, (iii) may not be complete and
may not reflect all information and findings obtained by Agent or its Related Persons regarding the operations and condition of the Credit
Parties. Neither Agent nor any of its Related Persons makes any representations or warranties of any kind with respect to (i) any existing or
proposed financing, (ii) the accuracy or completeness of the information contained in any Agent Report or in any related documentation,
(iii) the scope or adequacy of Agent’s and its Related Persons’ due diligence, or the presence or absence of any errors or omissions contained in
any Agent Report or in any related documentation, and (iv) any work performed by Agent or Agent’s Related Persons in connection with or
using any Agent Report or any related documentation.
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(d) Neither Agent nor any of its Related Persons shall have any duties or obligations in connection with or as a result of any Lender
or L/C Issuer receiving a copy of any Agent Report. Without limiting the generality of the forgoing, neither Agent nor any of its Related
Persons shall have any responsibility for the accuracy or completeness of any Agent Report, or the appropriateness of any Agent Report for any
Lender’s or L/C Issuer’s purposes, and shall have no duty or responsibility to correct or update any Agent Report or disclose to any Lender or
L/C Issuer any other information not embodied in any Agent Report, including any supplemental information obtained after the date of any
Agent Report. Each Lender and L/C Issuer releases, and agrees that it will not assert, any claim against Agent or its Related Persons that in any
way relates to any Agent Report or arises out of any Lender or L/C Issuer having access to any Agent Report or any discussion of its contents,
and agrees to indemnify and hold harmless Agent and its Related Persons from all claims, liabilities and expenses relating to a breach by any
Lender or L/C Issuer arising out of such Lender’s or L/C Issuer’s access to any Agent Report or any discussion of its contents.
8.6 Agent Individually . Agent and its Affiliates may make loans and other extensions of credit to, acquire Stock and Stock Equivalents
of, engage in any kind of business with, any Credit Party or Affiliate thereof as though it were not acting as Agent and may receive separate
fees and other payments therefor. To the extent Agent or any of its Affiliates makes any Loan or otherwise becomes a Lender hereunder, it
shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as any other
Lender and the terms “Lender”, “Required Lender” and any similar terms shall, except where otherwise expressly provided in any Loan
Document, include Agent or such Affiliate, as the case may be, in its individual capacity as Lender or as one of the Required Lenders.
8.7 Lender Credit Decision .
(a) Each Lender and each L/C Issuer acknowledges that it shall, independently and without reliance upon Agent, any Lender or L/C
Issuer or any of their Related Persons or upon any document (including any offering and disclosure materials in connection with the
syndication of the Loans) solely or in part because such document was transmitted by Agent or any of its Related Persons, conduct its own
independent investigation of the financial condition and affairs of each Credit Party and make and continue to make its own credit decisions in
connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in
any Loan Document, in each case based on such documents and information as it shall deem appropriate. Except for documents expressly
required by any Loan Document to be transmitted by Agent to the Lenders or L/C Issuers, Agent shall not have any duty or responsibility to
provide any Lender or L/C Issuer with any credit or other information concerning the business, prospects, operations, Property, financial and
other condition or creditworthiness of any Credit Party or any Affiliate of any Credit Party that may come in to the possession of Agent or any
of its Related Persons.
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(b) If any Lender or L/C Issuer has elected to abstain from receiving MNPI concerning the Credit Parties or their Affiliates, such
Lender or L/C Issuer acknowledges that, notwithstanding such election, Agent and/or the Credit Parties will, from time to time, make available
syndicate-information (which may contain MNPI) as required by the terms of, or in the course of administering the Loans to the credit
contact(s) identified for receipt of such information on the Lender’s administrative questionnaire who are able to receive and use all
syndicate-level information (which may contain MNPI) in accordance with such Lender’s compliance policies and contractual obligations and
applicable law, including federal, state, provincial and territorial securities laws; provided , that if such contact is not so identified in such
questionnaire, the relevant Lender or L/C Issuer hereby agrees to promptly (and in any event within one (1) Business Day) provide such a
contact to Agent and the Credit Parties upon request therefor by Agent or the Credit Parties. Notwithstanding such Lender’s or L/C Issuer’s
election to abstain from receiving MNPI, such Lender or L/C Issuer acknowledges that if such Lender or L/C Issuer chooses to communicate
with Agent, it assumes the risk of receiving MNPI concerning the Credit Parties or their Affiliates.
8.8 Expenses; Indemnities; Withholding .
(a) Each Lender agrees to reimburse Agent and each of its Related Persons (to the extent not reimbursed by any Credit Party)
promptly upon demand, severally and ratably, for any costs and expenses (including fees, charges and disbursements of financial, legal and
other advisors and Other Taxes paid in the name of, or on behalf of, any Credit Party) that may be incurred by Agent or any of its Related
Persons in connection with the preparation, syndication, execution, delivery, administration, modification, consent, waiver or enforcement of,
or the taking of any other action (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other
proceeding (including, preparation for and/or response to any subpoena or request for document production relating thereto) or otherwise) in
respect of, or legal advice with respect to its rights or responsibilities under, any Loan Document.
(b) Each Lender further agrees to indemnify Agent, each L/C Issuer and each of their respective Related Persons (to the extent not
reimbursed by any Credit Party), severally and ratably, from and against Liabilities (including, to the extent not indemnified pursuant to
Section 8.8(c) , Taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to or for the
account of any Lender) that may be imposed on, incurred by or asserted against Agent, any L/C Issuer or any of their respective Related
Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document, any Related Agreement or any other
act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by
Agent, any L/C Issuer or any of their respective Related Persons under or with respect to any of the foregoing; provided , however , that no
Lender shall be liable to Agent, any L/C Issuer or
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any of their respective Related Persons to the extent such liability has resulted primarily from the gross negligence or willful misconduct of
such Person, as determined by a court of competent jurisdiction in a final non-appealable judgment or order.
(c) To the extent required by any Requirement of Law, Agent may withhold from any payment to any Lender under a Loan
Document an amount equal to any applicable withholding Tax (including withholding Taxes imposed under Chapters 3 and 4 of Subtitle A of
the Code). If the IRS or the CRA or any other Governmental Authority asserts a claim that Agent did not properly withhold Tax from amounts
paid to or for the account of any Lender (because the appropriate certification form was not delivered, was not properly executed, or fails to
establish an exemption from, or reduction of, withholding Tax with respect to a particular type of payment, or because such Lender failed to
notify Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding Tax
ineffective, failed to maintain a Participant Register or for any other reason), or Agent reasonably determines that it was required to withhold
Taxes from a prior payment but failed to do so, such Lender shall promptly indemnify Agent fully for all amounts paid, directly or indirectly,
by Agent as Tax or otherwise, including penalties and interest, and together with all expenses incurred by Agent, including legal expenses,
allocated internal costs and out-of-pocket expenses. Agent may offset against any payment to any Lender under a Loan Document, any
applicable withholding Tax that was required to be withheld from any prior payment to such Lender but which was not so withheld, as well as
any other amounts for which Agent is entitled to indemnification from such Lender under this Section 8.8(c) .
8.9 Resignation of Agent or L/C Issuer .
(a) Agent may resign at any time by delivering notice of such resignation to the Lenders and the Borrower Representative, effective
on the date set forth in such notice or, if no such date is set forth therein, upon the date such notice shall be effective in accordance with the
terms of this Section 8.9 . If Agent delivers any such notice, the Required Lenders shall have the right to appoint a successor Agent. If, within
thirty (30) days after the retiring Agent’s having given notice of resignation, no successor Agent has been appointed by the Required Lenders
that has accepted such appointment, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent from among the Lenders.
Each appointment under this clause (a) shall be subject to the prior consent of the Borrower Representative, which may not be unreasonably
withheld but shall not be required during the continuance of an Event of Default.
(b) Effective immediately upon its resignation, (i) the retiring Agent shall be discharged from its duties and obligations under the
Loan Documents, (ii) the Lenders shall assume and perform all of the duties of Agent until a successor Agent shall have accepted a valid
appointment hereunder, (iii) the retiring Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document
other than with respect to any actions taken or omitted to be taken while such retiring Agent was, or because such Agent had been, validly
acting as Agent under the Loan Documents and (iv) subject to its rights under Section 8.3 , the retiring Agent shall take such action as
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may be reasonably necessary to assign to the successor Agent its rights as Agent under the Loan Documents. Effective immediately upon its
acceptance of a valid appointment as Agent, a successor Agent shall succeed to, and become vested with, all the rights, powers, privileges and
duties of the retiring Agent under the Loan Documents.
(c) Any L/C Issuer may resign at any time by delivering notice of such resignation to Agent, effective on the date set forth in such
notice or, if no such date is set forth therein, on the date such notice shall be effective. Upon such resignation, the L/C Issuer shall remain an
L/C Issuer and shall retain its rights and obligations in its capacity as such (other than any obligation to Issue Letters of Credit but including the
right to receive fees or to have Lenders participate in any L/C Reimbursement Obligation thereof) with respect to Letters of Credit Issued by
such L/C Issuer prior to the date of such resignation and shall otherwise be discharged from all other duties and obligations under the Loan
Documents.
8.10 Release of Collateral or Guarantors . Each Lender and L/C Issuer hereby consents to the release and hereby directs Agent to release
(or, in the case of clause (b)(ii) below, release or subordinate) the following:
(a) any Subsidiary of a Borrower from its guaranty of any Obligation if all of the Stock and Stock Equivalents of such Subsidiary
owned by any Credit Party are sold or transferred in a transaction permitted under the Loan Documents (including pursuant to a waiver or
consent);
(b) any Lien held by Agent for the benefit of the Secured Parties against (i) any Collateral that is sold, transferred, conveyed or
otherwise disposed of by a Credit Party in a transaction permitted by the Loan Documents (including pursuant to a waiver or consent), (ii) any
Property subject to a Lien permitted hereunder in reliance upon Section 5.1(h) or 5.1(i) and (iii) all of the Collateral and all Credit Parties, upon
(A) termination of the Revolving Loan Commitments, (B) payment and satisfaction in full of all Loans, all L/C Reimbursement Obligations
and all other Obligations under the Loan Documents and all Obligations arising under Secured Rate Contracts, that Agent has theretofore been
notified in writing by the holder of such Obligation are then due and payable, (C) deposit of cash collateral with respect to all Contingent
Obligations (excluding Contingent Obligations (other than L/C Reimbursement Obligations) as to which no claim has been asserted) (or, as an
alternative to cash collateral in the case of any Letter of Credit Obligation, receipt by Agent of a back-up letter of credit), in amounts and on
terms and conditions and with parties reasonably satisfactory to Agent and each Indemnitee that is, or may be, owed such Obligations as to
which no claim has been asserted) and (D) to the extent requested by Agent, receipt by Agent and the Secured Parties of liability releases from
the Credit Parties each in form and substance acceptable to Agent;
(c) should Aleris Recycling Bens Run, LLC, a Delaware limited liability company, consummate the swap transaction with respect
to its owned Real Estate located at 12107 Energy Highway, Friendly, West Virginia as described in that certain Memorandum of
Understanding dated June 10, 2014 with the Tyler County
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Development Authority, Inc. (the “ Tyler Swap ”), Agent shall promptly release its Mortgage over such Real Estate, provided that Agent is
granted a Mortgage in accordance with Section 4.13(b) over any Real Estate for which such Credit Party receives a fee interest in pursuant to
the terms of the Tyler Swap; and
(d) Each Lender and L/C Issuer hereby directs Agent, and Agent hereby agrees, upon receipt of at least five (5) Business Days’
advance notice from the Borrower Representative, to execute and deliver or file such documents and to perform other actions reasonably
necessary to release the guaranties and Liens when and as directed in this Section 8.10 .
8.11 Additional Secured Parties . The benefit of the provisions of the Loan Documents directly relating to the Collateral or any Lien
granted thereunder shall extend to and be available to any Secured Party that is not a Lender or L/C Issuer party hereto as long as, by accepting
such benefits, such Secured Party agrees, as among Agent and all other Secured Parties, that such Secured Party is bound by (and, if requested
by Agent, shall confirm such agreement in a writing in form and substance acceptable to Agent) this Article VIII and Sections 9.3 , 9.9 , 9.10 ,
9.11 , 9.17 , 9.27 and 10.1 (and, solely with respect to L/C Issuers, Section 1.1(c) ) and the decisions and actions of Agent and the Required
Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of the Lenders or other parties hereto as required
herein) to the same extent a Lender is bound; provided , however , that, notwithstanding the foregoing, (a) such Secured Party shall be bound
by Section 8.8 only to the extent of Liabilities, costs and expenses with respect to or otherwise relating to the Collateral held for the benefit of
such Secured Party, in which case the obligations of such Secured Party thereunder shall not be limited by any concept of pro rata share or
similar concept, (b) each of Agent, the Lenders and the L/C Issuers party hereto shall be entitled to act at its sole discretion, without regard to
the interest of such Secured Party, regardless of whether any Obligation to such Secured Party thereafter remains outstanding, is deprived of the
benefit of the Collateral, becomes unsecured or is otherwise affected or put in jeopardy thereby, and without any duty or liability to such
Secured Party or any such Obligation and (c) except as otherwise set forth herein, such Secured Party shall not have any right to be notified of,
consent to, direct, require or be heard with respect to, any action taken or omitted in respect of the Collateral or under any Loan Document.
8.12 Sole Lead Arranger and Bookrunner . The Borrowers hereby appoints GECM to be the sole lead arranger and bookrunner with
respect to the revolving credit facility contemplated by this Agreement (the “ Lead Arranger ”). Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Lead Arranger shall not have any duties or responsibilities, nor
shall the Lead Arranger have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the
Lead Arranger. At any time that any Lender serving (or whose Affiliate is serving) as the Lead Arranger shall have transferred to any other
Person (other than any Affiliates) all of its interests in the Revolving Loan Commitment, such Lender (or an Affiliate of such Lender acting as
Lead Arranger) shall be deemed to have concurrently resigned as such Lead Arranger.
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8.13 Information Regarding Bank Products . Each Lender agrees that, upon the reasonable request of Agent, it shall from time to time
provide Agent with updated information regarding Bank Product Obligations owing to such Lender or its Affiliates in order to facilitate
Agent’s administration of the revolving credit facility contemplated by this Agreement (it being understood that upon failure of any Lender or
any Affiliate of a Lender to provide such information, Agent may, in its discretion, exclude the Bank Product Obligations owing to such Lender
or such Affiliate from the Obligations and from distributions under Section 1.10(c) ).
8.14 Intercreditor Agreement . Agent is authorized to enter into the Intercreditor Agreement, and the parties hereto acknowledge that the
Intercreditor Agreement is binding upon them. Each Lender and L/C Issuer (a) hereby consents to the subordination of the Liens on the Notes
Priority Collateral securing the Obligations on the terms set forth in the Intercreditor Agreement, (b) hereby agrees that it will be bound by the
provisions of the Intercreditor Agreement as if it were a signatory thereto and will take no actions contrary to the provisions of the Intercreditor
Agreement, (c) hereby authorizes and instructs Agent to enter into the Intercreditor Agreement and to subject the Liens on the Collateral
securing the Obligations to the provisions thereof, in each case on behalf of such Lender or L/C Issuer and to take all actions (and execute all
documents) required (or deemed advisable) by Agent in accordance with the terms of the Intercreditor Agreement, in each case without any
further consent, authorization or other action by such Lender, (d) hereby agrees that no Lender or L/C Issuer shall have any right of action
whatsoever against Agent as a result of any action taken or not taken by Agent pursuant to this Section 8.14 or in accordance with the terms of
the Intercreditor Agreement and (e) acknowledges that a copy of the Intercreditor Agreement has been delivered, or made available, to such
Lender or L/C Issuer. The foregoing provisions are intended as an inducement to the Secured Parties to extend credit to the Borrowers and such
Secured Parties are intended third-party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.
8.15 Parallel Debt ( Covenant to pay the Agent ).
Notwithstanding any other provision of this Agreement, each Borrower hereby irrevocably and unconditionally undertakes to pay to the
Agent, as creditor in its own right and not as representative of the other Secured Parties, sums equal to and in the currency of each amount
payable by such Borrower to Secured Parties under each of the Loan Documents as and when that amount falls due for payment under the
relevant Loan Document or would have fallen due but for any discharge resulting from failure of another Secured Party to take appropriate
steps, in insolvency proceedings affecting that Borrower, to preserve its entitlement to be paid that amount.
The Agent shall have its own independent right to demand payment of the amounts payable by each Borrower under this Section 8.15 ,
irrespective of any discharge of such Borrower’s obligation to pay those amounts to the other Secured Parties resulting from failure by them to
take appropriate steps, in insolvency proceedings affecting that Borrower, to preserve their entitlement to be paid those amounts.
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Any amount due and payable by a Borrower to the Agent under this Section 8.15 shall be decreased to the extent that the other Secured
Parties have received (and are able to retain) payment in full of the corresponding amount under the other provisions of the Loan Documents
and any amount due and payable by a Borrower to the other Secured Parties under those provisions shall be decreased to the extent that the
Agent has received (and is able to retain) payment in full of the corresponding amount under this Section 8.15 .
The rights of the Secured Parties (other than the Agent) to receive payment of amounts payable by each Borrower under the Loan
Documents are several and are separate and independent from, and without prejudice to, the rights of the Agent to receive payment under this
Section 8.15 .
ARTICLE IX.
MISCELLANEOUS
9.1 Amendments and Waivers .
(a) Subject to the provisions of Section 9.1(g) , no amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by any Credit Party therefrom, shall be effective unless the same shall be in writing
and signed by Agent, the Required Lenders (or by Agent with the consent of the Required Lenders), and the Borrowers, and then such waiver
shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Lenders directly and adversely affected thereby (or by Agent with the
consent of all the Lenders directly affected thereby), in addition to Agent and the Required Lenders (or by Agent with the consent of the
Required Lenders) and the Borrowers, do any of the following:
(i) increase or extend the Commitment of such Lender (or reinstate any Commitment terminated pursuant to Section 7.2(a) );
(ii) postpone or delay any date fixed for, or reduce or waive, any scheduled installment of principal or any payment of
interest, fees or other amounts (other than principal) due to the Lenders (or any of them) or L/C Issuer hereunder or under any other Loan
Document (for the avoidance of doubt, mandatory prepayments pursuant to Section 1.8 and any obligation to repay an Overadvance may be
postponed, delayed, reduced, waived or modified with the consent of Required Lenders);
(iii) reduce the principal of, or the rate of interest specified herein or the amount of interest payable in cash specified herein
on any Loan, or of any fees or other amounts payable hereunder or under any other Loan Document, including L/C Reimbursement
Obligations;
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(iv) amend or modify Section 1.10(c) ;
(v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which shall be
required for the Lenders or any of them to take any action hereunder;
(vi) amend this Section 9.1 (other than Section 9.1(c) ) or, subject to the terms of this Agreement, the definition of Required
Lenders or any provision providing for consent or other action by all Lenders; or
(vii) discharge any Credit Party from its respective payment Obligations under the Loan Documents, or release all or
substantially all of the Collateral, except as otherwise may be provided in this Agreement or the other Loan Documents;
it being agreed that all Lenders shall be deemed to be directly affected by an amendment or waiver of the type described in the preceding
clauses (v) , (vi) and (vii) .
(b) No amendment, waiver or consent shall, unless in writing and signed by Agent, the Swingline Lender or the L/C Issuer, as the
case may be, in addition to the Required Lenders or all Lenders directly affected thereby, as the case may be (or by Agent with the consent of
the Required Lenders or all the Lenders directly affected thereby, as the case may be), affect the rights or duties of Agent, the Swingline Lender
or the L/C Issuer, as applicable, under this Agreement or any other Loan Document. No amendment, modification or waiver of this Agreement
or any Loan Document altering the ratable treatment of Obligations arising under Secured Rate Contracts resulting in such Obligations being
junior in right of payment to principal on the Loans or resulting in Obligations owing to any Secured Swap Provider becoming unsecured (other
than releases of Liens permitted in accordance with the terms hereof), in each case in a manner adverse to any Secured Swap Provider, shall be
effective without the written consent of such Secured Swap Provider or, in the case of a Secured Rate Contract provided or arranged by GE
Capital or an Affiliate of GE Capital, GE Capital.
(c) No amendment or waiver shall, unless signed by Agent and Required Lenders (or by Agent with the consent of Required
Lenders) in addition to the Required Lenders (or by Agent with the consent of the Required Lenders): (i) amend or waive compliance with the
conditions precedent to the obligations of Lenders to make any Revolving Loan (or of L/C Issuer to Issue any Letter of Credit) in Section 2.2 ;
(ii) amend or waive non-compliance with any provision of Section 1.1(a)(iii) ; or (iii) waive any Default or Event of Default for the purpose of
satisfying the conditions precedent to the obligations of Lenders to make any Revolving Loan (or of any L/C Issuer to Issue any Letter of
Credit) in Section 2.2 ; or (iv) amend or modify the definitions of Eligible Accounts, Eligible Inventory, the U.S. Borrowing Base or the
Canadian Borrowing Base, including any increase in the percentage advance rates in the definition of the U.S. Borrowing Base or the Canadian
Borrowing Base, in a manner which would increase the availability of credit under the Revolving Loan. No amendment or waiver shall, unless
signed by Agent and all Lenders (or by Agent with the consent of all Lenders) in addition
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to the Required Lenders (or by Agent with the consent of the Required Lenders), (A) amend or waive this Section 9.1(c) or the definitions of
the terms used in this Section 9.1(c) insofar as the definitions affect the substance of this Section 9.1(c) ; or (B) change (1) the definition of the
term Required Lenders, (2) the percentage of Lenders which shall be required for Lenders to take any action hereunder or (3) any specific right
of Required Lenders to grant or withhold consent or take or omit to take any action hereunder.
(d) If any amendment or modification to the Indenture Documents amends or modifies any covenant (including any financial
covenant) or event of default contained in the Indenture Documents (or any related definitions), in each case, in a manner that is more
restrictive than the applicable provisions of the Loan Document permit as of the date thereof, or if any amendment or modification to any
Indenture Document adds an additional covenant or event of default therein, the Credit Parties acknowledge and agree that this Agreement or
the other Loan Documents, as the case may be, subject to the approval of the Required Lenders (and each Lender directly and adversely
affected thereby to the extent Section 9.1(a) requires the approval of such Lender to amend or modify such term), may be amended or modified
to affect similar amendments or modifications with respect to this Agreement or such other Loan Documents, without the need for any further
action or consent by any Credit Party or any other party. In furtherance of the foregoing, the Credit Parties shall permit the Agent and Lenders
to document each such similar amendment or modification to this Agreement or such other Loan Document or insert a corresponding new
covenant or event of default in this Agreement or such other Loan Document without any need for any further action or consent by the Credit
Parties.
(e) Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent rights
under or with respect to any Loan Document or constitute a “Lender” (or be, or have its Loans and Commitments, included in the
determination of “Required Lenders” or “Lenders directly affected” pursuant to this Section 9.1 ) for any voting or consent rights under or with
respect to any Loan Document, except that a Non-Funding Lender shall be treated as an “affected Lender” for purposes of Section 9.1(a)(i) and
9.1(a)(iii) solely with respect to an increase in such Non-Funding Lender’s Commitments, a reduction of the principal amount owed to such
Non-Funding Lender or, unless such Non-Funding Lender is treated the same as the other Lenders holding Loans of the same type, a reduction
in the interest rates applicable to the Loans held by such Non-Funding Lender. Moreover, for the purposes of determining the Required
Lenders, the Loans and Commitments held by Non-Funding Lenders shall be excluded from the total Loans and Commitments outstanding.
(f) Notwithstanding anything set forth herein to the contrary, this Agreement may be amended with the written consent of Agent,
the Borrower Representative and the Required Lenders to (i) add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the outstanding principal and accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans and the accrued interest and fees in
respect thereof and (ii) include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.
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(g) Notwithstanding anything to the contrary contained in this Section 9.1 , (i) Borrowers may amend Schedules 3.19 and 3.21 upon
written notice to Agent and (ii) Agent and Borrowers may amend or modify this Agreement and any other Loan Document to (1) cure any
ambiguity, omission, defect or inconsistency therein, and (2) grant a new Lien for the benefit of the Secured Parties, extend an existing Lien
over additional Property for the benefit of the Secured Parties or join additional Persons as Credit Parties; provided that no Accounts or
Inventory of such Person shall be included as Eligible Accounts or Eligible Inventory until a field examination (and, if required by Agent, an
Inventory appraisal) with respect thereto has been completed to the satisfaction of Agent, including the establishment of Reserves required in
Agent’s Permitted Discretion.
9.2 Notices .
(a) Addresses . All notices and other communications required or expressly authorized to be made by this Agreement shall be given
in writing, unless otherwise expressly specified herein, and (i) addressed to the address set forth on the applicable signature page hereto,
(ii) posted to Syndtrak ® (to the extent such system is available and set up by or at the direction of Agent prior to posting) in an appropriate
location by uploading such notice, demand, request, direction or other communication to www.syndtrak.com or using such other means of
posting to Syndtrak ® as may be available and reasonably acceptable to Agent prior to such posting, (iii) posted to any other E-System
approved by or set up by or at the direction of Agent (with the consent of the Borrower Representative, which shall not be unreasonably
conditioned, delayed or withheld) or (iv) addressed to such other address as shall be notified in writing (A) in the case of the Borrowers, Agent
and the Swingline Lender, to the other parties hereto and (B) in the case of all other parties, to the Borrower Representative and Agent.
Transmissions made by electronic mail or E-Fax to Agent shall be effective only (x) for notices where such transmission is specifically
authorized by this Agreement, (y) if such transmission is delivered in compliance with procedures of Agent applicable at the time and
previously communicated to the Borrower Representative, and (z) if receipt of such transmission is acknowledged by Agent.
(b) Effectiveness .
(i) All communications described in clause (a) above and all other notices, demands, requests and other communications
made in connection with this Agreement shall be effective and be deemed to have been received (A) if delivered by hand, upon personal
delivery, (B) if delivered by overnight courier service, one (1) Business Day after delivery to such courier service, (C) if delivered by mail,
three (3) Business Days after deposit in the mail, (D) if delivered by facsimile (other than to post to an E-System pursuant to clause (a)(ii) or
(a)(iii) above), upon sender’s receipt of confirmation of proper transmission, and (E) if delivered by posting to any E-System, on the later of the
Business Day of such posting and the Business Day access to such posting
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is given to the recipient thereof in accordance with the standard procedures applicable to such E-System; provided , however , that no
communications to Agent pursuant to Article I shall be effective until received by Agent.
(ii) The posting, completion and/or submission by any Credit Party of any communication pursuant to an E-System shall
constitute a representation and warranty by the Credit Parties that any representation, warranty, certification or other similar statement required
by the Loan Documents to be provided, given or made by a Credit Party in connection with any such communication is true, correct and
complete except as expressly noted in such communication or E-System.
(c) Each Lender shall notify Agent in writing of any changes in the address to which notices to such Lender should be directed, of
addresses of its Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative
information as Agent shall reasonably request.
9.3 Electronic Transmissions .
(a) Authorization . Subject to the provisions of Section 9.2(a) , each of Agent, Lenders, each Credit Party and each of their Related
Persons, is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in
connection with any Loan Document and the transactions contemplated therein. Each Credit Party and each Secured Party hereto acknowledges
and agrees that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of
interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic
Transmissions.
(b) Signatures . Subject to the provisions of Section 9.2(a) , (i)(A) no posting to any E-System shall be denied legal effect merely
because it is made electronically, (B) each E-Signature on any such posting shall be deemed sufficient to satisfy any requirement for a
“signature” and (C) each such posting shall be deemed sufficient to satisfy any requirement for a “writing”, in each case including pursuant to
any Loan Document, any applicable provision of any UCC or PPSA, the Electronic Commerce Act, 2000 (Ontario) the federal Uniform
Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement
of Law governing such subject matter, (ii) each such posting that is not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such posting, an E-Signature, upon which
Agent, each Secured Party and each Credit Party may rely and assume the authenticity thereof, (iii) each such posting containing a signature, a
reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original and
(iv) each party hereto or beneficiary hereto agrees not to contest the validity or enforceability of any posting on any E-System or E-Signature
on any such posting under the provisions of any applicable Requirement of Law requiring certain documents to be in writing or signed;
provided , however , that nothing herein shall limit such party’s or beneficiary’s right to contest whether any posting to any E-System or
E-Signature has been altered after transmission.
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(c) Separate Agreements . All uses of an E-System shall be governed by and subject to, in addition to Section 9.2 and this
Section 9.3 , the separate terms, conditions and privacy policy posted or referenced in such E-System (or such terms, conditions and privacy
policy as may be updated from time to time, including on such E-System) and related Contractual Obligations executed by Agent and Credit
Parties in connection with the use of such E-System.
(d) LIMITATION OF LIABILITY . ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS
IS” AND “AS AVAILABLE”. NONE OF AGENT, ANY LENDER OR ANY OF THEIR RELATED PERSONS WARRANTS THE
ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION AND DISCLAIMS ALL
LIABILITY FOR ERRORS OR OMISSIONS THEREIN. NO WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR
ANY OF THEIR RELATED PERSONS IN CONNECTION WITH ANY E-SYSTEMS OR ELECTRONIC COMMUNICATION,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF
THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS. Each Borrower, each other Credit Party
executing this Agreement and each Secured Party agrees that Agent has no responsibility for maintaining or providing any equipment,
software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System.
9.4 No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising, on the part of Agent or any Lender, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. No course of
dealing between any Credit Party, any Affiliate of any Credit Party, Agent or any Lender shall be effective to amend, modify or discharge any
provision of this Agreement or any of the other Loan Documents.
9.5 Costs and Expenses . Any action taken by any Credit Party under or with respect to any Loan Document, even if required under any
Loan Document or at the request of Agent or Required Lenders, shall be at the expense of such Credit Party, and neither Agent nor any other
Secured Party shall be required under any Loan Document to reimburse any Credit Party or any Subsidiary of any Credit Party therefor except
as expressly provided therein. In addition, the U.S. Borrowers (with respect to all Obligations and all Credit Parties) and the Canadian
Borrower (solely with respect to the Canadian Obligations and the Canadian Credit Parties) agree to pay or reimburse upon demand (a) Agent
for all reasonable out-of-pocket costs and expenses incurred by it or any of its Related Persons, in connection with the investigation,
development, preparation, negotiation, syndication, execution, interpretation or administration of, any modification of any term of or
termination of, any Loan Document, any commitment or
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proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction
contemplated therein, in each case including Attorney Costs of Agent, the cost of environmental audits, insurance reviews, Collateral audits
and appraisals, background checks, out-of-pocket costs and expenses in connection with the engagement or retention of any consultants or
advisors and any other out-of-pocket costs and expenses similar to any of the foregoing, (b) Agent for all reasonable costs and expenses
incurred by it or any of its Related Persons in connection with internal audit reviews, field examinations and Collateral examinations (which
shall be reimbursed, in addition to the out-of-pocket costs and expenses of such examiners, at the per diem rate per individual charged by Agent
for its examiners), subject to Section 4.9 , (c) each of Agent, its Related Persons, and L/C Issuer for all costs and expenses incurred in
connection with (i) any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out”, (ii) the
enforcement or preservation of any right or remedy under any Loan Document, any Obligation, with respect to the Collateral or any other
related right or remedy or (iii) the commencement, defense, conduct of, intervention in, or the taking of any other action (including preparation
for and/or response to any subpoena or request for document production relating thereto) with respect to, any proceeding (including any
bankruptcy or insolvency proceeding) related to any Credit Party, any Subsidiary of any Credit Party, any Loan Document, any Obligations or
any Related Transaction, including Attorney Costs and (d) fees and disbursements of Attorney Costs of one law firm on behalf of all Lenders
(other than Agent) incurred in connection with any of the matters referred to in clause (c) above.
9.6 Indemnity .
(a) The U.S. Borrowers, jointly and severally, with respect to all Liabilities and all Credit Parties, and the Canadian Borrower,
solely with respect to Liabilities arising in connection with the Canadian Obligations and all Canadian Credit Parties, each agree to indemnify,
hold harmless and defend Agent, each Lender, each L/C Issuer and each of their respective Related Persons (each such Person being an “
Indemnitee ”) from and against all Liabilities (including brokerage commissions, fees and other compensation) that may be imposed on,
incurred by or asserted against any such Indemnitee in any matter relating to or arising out of, in connection with or as a result of (i) any Loan
Document, any Related Agreement, any Obligation (or the repayment thereof), any Letter of Credit, the use or intended use of the proceeds of
any Loan or the use of any Letter of Credit or any securities filing of, or with respect to, any Credit Party, (ii) any commitment letter, proposal
letter or term sheet with any Person or any Contractual Obligation, arrangement or understanding with any broker, finder or consultant, in each
case entered into by or on behalf of the Target, any Credit Party or any Affiliate of any of them in connection with any of the foregoing and any
Contractual Obligation entered into in connection with any E-Systems or other Electronic Transmissions, (iii) any actual or prospective
investigation, litigation or other proceeding, whether or not brought by any such Indemnitee or any of its Related Persons, any holders of
securities or creditors (and including attorneys’ fees in any case), whether or not any such Indemnitee, Related Person, holder or creditor is a
party thereto, and whether or not based on any securities or commercial law or regulation or any other Requirement of Law or theory thereof,
including common law, equity, contract, tort or otherwise, (iv) any
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Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any L/C Issuer to honor a demand for
payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such
Letter of Credit), or (v) any other act, event or transaction related, contemplated in or attendant to any of the foregoing (collectively, the “
Indemnified Matters ”); provided , however , that no Credit Party shall have any liability under this Section 9.6 to any Indemnitee with respect
to any Indemnified Matter, and no Indemnitee shall have any liability with respect to any Indemnified Matter other than (to the extent
otherwise liable), to the extent such liability has resulted primarily from the gross negligence or willful misconduct of such Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable judgment or order. Furthermore, each Borrower and each other Credit
Party executing this Agreement waives and agrees not to assert against any Indemnitee, and shall cause each of its Subsidiaries to waive and
not assert against any Indemnitee, any right of contribution with respect to any Liabilities that may be imposed on, incurred by or asserted
against any Related Person. This Section 9.6(a) shall not apply with respect to Taxes other than any Taxes that represent Liabilities arising from
any non-Tax claim.
(b) Without limiting the foregoing, “Indemnified Matters” includes all Environmental Liabilities, including those arising from, or
otherwise involving, any Property of any Credit Party or any Related Person of any Credit Party or any actual, alleged or prospective damage to
Property or natural resources or harm or injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such
Property or natural resource or any Property on or contiguous to any Real Estate of any Credit Party or any Related Person of any Credit Party,
whether or not, with respect to any such Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold mortgage, a
mortgagee in possession, the successor-in-interest to any Credit Party or any Related Person of any Credit Party or the owner, lessee or operator
of any Property of any Related Person through any foreclosure action, in each case except to the extent such Environmental Liabilities (i) are
incurred solely following foreclosure by Agent or following Agent or any Lender having become the successor-in-interest to any Credit Party
or any Related Person of any Credit Party and (ii) are attributable solely to acts of such Indemnitee.
9.7 Marshaling; Payments Set Aside . No Secured Party shall be under any obligation to marshal any Property in favor of any Credit
Party or any other Person or against or in payment of any Obligation. To the extent that any Secured Party receives a payment from a
Borrower, from any other Credit Party, from the proceeds of the Collateral, from the exercise of its rights of setoff, any enforcement action or
otherwise, and such payment is subsequently, in whole or in part, invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party, then to the extent of such recovery, the obligation or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not occurred.
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9.8 Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided that any assignment by any Lender shall be subject to the provisions of Section 9.9 , and
provided further that no Borrower or other Credit Party may assign or transfer any of its rights or obligations under this Agreement or any other
Loan Document without the prior written consent of Agent and each Lender.
9.9 Binding Effect; Assignments and Participations .
(a) Binding Effect . This Agreement shall become effective when it shall have been executed by the Holding Companies, the
Borrowers, the other Credit Parties signatory hereto and Agent and when Agent shall have been notified by each Lender that such Lender has
executed it. Thereafter, it shall be binding upon and inure to the benefit of, but only to the benefit of, the Holding Companies, the Borrowers,
the other Credit Parties party hereto (in each case except for Article VIII ), Agent, each Lender and each L/C Issuer receiving the benefits of the
Loan Documents and, to the extent provided in Section 8.11 , each other Secured Party and, in each case, their respective successors and
permitted assigns. Except as expressly provided in any Loan Document (including in Section 8.9 ), none of the Holding Companies, any
Borrower, any other Credit Party, any L/C Issuer or Agent shall have the right to assign any rights or obligations hereunder or any interest
herein.
(b) Right to Assign . Each Lender may sell, transfer, negotiate or assign (a “ Sale ”) all or a portion of its rights and obligations
hereunder (including all or a portion of its Commitments and its rights and obligations with respect to Loans and Letters of Credit) to
(i) any existing Lender (other than a Non-Funding Lender or Impacted Lender);
(ii) any Affiliate or Approved Fund of any existing Lender (other than a Non-Funding Lender or Impacted Lender); or
(iii) any other Person acceptable (which acceptance shall not be unreasonably withheld or delayed) to Agent and, with respect to
Sales of Revolving Loan Commitments, each L/C Issuer that is a Lender and, as long as no Event of Default is continuing, the Borrower
Representative (which acceptances shall be deemed to have been given unless an objection is delivered to Agent within five (5) Business Days
after notice of a proposed sale is delivered to Borrower Representative); provided , however , that:
(A) such Sales must be ratable among the obligations owing to and owed by such Lender with respect to the Revolving Loans;
(B) for each Loan, the aggregate outstanding principal amount (determined as of the effective date of the applicable Assignment) of
the Loans, Commitments and Letter of Credit Obligations subject to any such Sale shall be in a minimum amount of $1,000,000, unless such
Sale is made to an existing Lender or an Affiliate or Approved Fund of any existing Lender, is of the assignor’s (together with its Affiliates and
Approved Funds) entire interest in such facility or is made with the prior consent of the Borrower Representative (to the extent required) and
Agent;
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(C) such Sales shall be effective only upon the acknowledgement in writing of such Sale by Agent;
(D) interest accrued prior to and through the date of any such Sale may not be assigned; and
(E) such Sales by Lenders who are Non-Funding Lenders due to clause (a) of the definition of Non-Funding Lender shall be
subject to Agent’s prior written consent in all instances, unless in connection with such Sale, such Non-Funding Lender cures, or causes the
cure of, its Non-Funding Lender status as contemplated in Section 1.11(e)(v) .
Agent’s refusal to accept a Sale to a Credit Party, an Affiliate of a Credit Party, a holder of Notes Pari Passu Lien Obligations or an Affiliate of
such a holder, or to any Person that would be a Non-Funding Lender or an Impacted Lender, or to any Person that cannot (either directly or
through an Applicable Designee) lend to the Canadian Borrower, or the imposition of conditions or limitations (including limitations on voting)
upon Sales to such Persons, shall not be deemed to be unreasonable. Any purported assignment or transfer by a Lender of its rights or
obligations under this Agreement and the other Loan Documents that does not comply with the terms hereof shall be treated for purposes of
this Agreement as a sale by such Lender of a participation of such rights and obligations in accordance with Section 9.9(f) .
(c) Procedure . The parties to each Sale made in reliance on clause (b) above (and excluding those described in clause (e) , (f) or
(g) below) shall execute and deliver to Agent an Assignment via an electronic settlement system designated by Agent (or, if previously agreed
with Agent, via a manual execution and delivery of the Assignment) evidencing such Sale, together with any existing Note subject to such Sale
(or any affidavit of loss therefor acceptable to Agent), any Tax forms required to be delivered pursuant to Section 10.1 and payment of an
assignment fee in the amount of $3,500 to Agent, unless waived or reduced by Agent; provided , that (i) if a Sale by a Lender is made to an
Affiliate or an Approved Fund of such assigning Lender, then no assignment fee shall be due in connection with such Sale, and (ii) if a Sale by
a Lender is made to an assignee that is not an Affiliate or Approved Fund of such assignor Lender, and concurrently to one or more Affiliates
or Approved Funds of such Assignee, then only one assignment fee of $3,500 shall be due in connection with such Sale (unless waived or
reduced by Agent). Upon receipt of all the foregoing, and conditioned upon such receipt and, if such Assignment is made in accordance with
clause (iii) of Section 9.9(b) , upon Agent (and the Borrower Representative, if applicable) consenting to such Assignment, from and after the
effective date specified in such Assignment, Agent shall record or cause to be recorded in the Register the information contained in such
Assignment.
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(d) Effectiveness . Subject to the recording of an Assignment by Agent in the Register pursuant to Section 1.4(b) , (i) the assignee
thereunder shall become a party hereto and, to the extent that rights and obligations under the Loan Documents have been assigned to such
assignee pursuant to such Assignment, shall have the rights and obligations of a Lender, (ii) any applicable Note shall be transferred to such
assignee through such entry and (iii) the assignor thereunder shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment, relinquish its rights (except for those surviving the termination of the Commitments and the
payment in full of the Obligations) and be released from its obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment (and, in the case of an Assignment covering all or the remaining portion of an assigning
Lender’s rights and obligations under the Loan Documents, such Lender shall cease to be a party hereto).
(e) Grant of Security Interests . In addition to the other rights provided in this Section 9.9 , each Lender may grant a security interest
in, or otherwise assign as collateral, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to
payments of principal or interest on the Loans), to (A) any federal reserve bank (pursuant to Regulation A of the Federal Reserve Board),
without notice to Agent or (B) any holder of, or trustee for the benefit of the holders of, such Lender’s Indebtedness or equity securities, by
notice to Agent; provided , however , that no such holder or trustee, whether because of such grant or assignment or any foreclosure thereon
(unless such foreclosure is made through an assignment in accordance with clause (b) above), shall be entitled to any rights of such Lender
hereunder and no such Lender shall be relieved of any of its obligations hereunder.
(f) Participants and Grant of Option to Fund to SPVs . In addition to the other rights provided in this Section 9.9 , each Lender may,
(x) with notice to Agent, grant to an SPV the option to make all or any part of any Loan that such Lender would otherwise be required to make
hereunder (and the exercise of such option by such SPV and the making of Loans pursuant thereto shall satisfy the obligation of such Lender to
make such Loans hereunder) and such SPV may assign to such Lender the right to receive payment with respect to any Obligation and
(y) without notice to or consent from Agent or the Borrowers, sell participations to one or more Persons in or to all or a portion of its rights and
obligations under the Loan Documents (including all its rights and obligations with respect to the Revolving Loans and Letters of Credit);
provided , however , that, whether as a result of any term of any Loan Document or of such grant or participation, (i) no such SPV or
participant shall have a commitment, or be deemed to have made an offer to commit, to make Loans hereunder, and, except as provided in the
applicable option agreement, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the
rights and obligations of the Credit Parties and the Secured Parties towards such Lender, under any Loan Document shall remain unchanged
and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the Obligations in the Register,
except that (A) each such participant and SPV shall be entitled to the benefit of Article X , but, with respect to Section 10.1 , only to the extent
such participant or SPV delivers the Tax forms such Lender is required to collect pursuant to Section 10.1(g) and then only to the extent of any
amount to which such Lender would be entitled in the absence of any such grant or participation except to the extent such entitlement to receive
a greater amount results
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from any change in, or in the interpretation of, any Requirement of Law that occurs after the date such grant or participation is made (and in
consideration of the foregoing, each such Participant and SPV shall be deemed to have acknowledged and agreed to be bound by the provisions
of Section 9.22 ) and (B) each such SPV may receive other payments that would otherwise be made to such Lender with respect to Loans
funded by such SPV to the extent provided in the applicable option agreement and set forth in a notice provided to Agent by such SPV and
such Lender, provided, however, that in no case (including pursuant to clause (A) or (B) above) shall an SPV granted an option pursuant to
this clause (f) or participant have the right to enforce any of the terms of any Loan Document, and (iii) the consent of such SPV or participant
shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or
consents with respect to any Loan Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in
respect of the Loan Documents (including the right to enforce or direct enforcement of the Obligations), except for those described in clauses
(ii) and (iii) of Section 9.1(a) with respect to amounts, or dates fixed for payment of amounts, to which such participant or SPV would
otherwise be entitled and, in the case of participants, except for those described in clause (vii) of Section 9.1(a) .
(g) Assignments to Affiliate SPVs . In addition to the other rights provided elsewhere in this Section 9.9 , each Lender that is an
Affiliate of the Agent may, with notice to Agent in such form as shall be acceptable to the Agent (but without the consent of any Person and
without compliance with any limitation or procedure specified in Sections 9.9(b) or 9.9(c) ), sell, transfer, negotiate or assign all or any portion
of its rights, title or interests hereunder with respect to any Revolving Loans (including any interest accrued or to accrue thereon) to an SPV
that is an Affiliate of such Lender, and such SPV may thereafter, with notice to Agent, assign such Loan to any other SPV that is an Affiliate of
such Lender or re-assign all or a portion of its interests in any Revolving Loans to the Lender holding the related Loan Commitment; provided ,
however , that, whether as a result of any term of any Loan Document or of such Sale, no such SPV shall have a commitment, or be deemed to
have made an offer to commit, to make Revolving Loans hereunder, and none shall be liable for any obligation of such Lender hereunder. In
the case of any Sale pursuant to this clause (g) , any assignee SPV shall have all the rights of a Lender hereunder, including the rights described
in Section 8.3(c) and the right to receive all payments with respect to the assigned Obligations. Each such SPV shall be entitled to the benefit of
Section 10.1 only to the extent such SPV delivers the tax forms the assigning Lender is required to collect pursuant to Section 10.1(g) .
(h) No party hereto shall institute (and the Borrowers and the Holding Companies shall cause each other Credit Party not to
institute) against any SPV that funds or purchases any Obligation pursuant to clauses (f) or (g) any bankruptcy, reorganization, insolvency,
liquidation or similar proceeding, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper of
such SPV; provided , however , that each Lender having designated an SPV as such agrees to indemnify each Indemnitee against any Liability
that may be incurred by, or asserted against, such Indemnitee as a result of failing to institute such proceeding (including a failure to be
reimbursed by such SPV for any such Liability). The agreement in the
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preceding sentence shall survive the termination of the Commitments and the payment in full of the Obligations. In addition, notwithstanding
anything to the contrary contained in this Section 9.9 , any SPV may disclose on a confidential basis any non-public information relating to its
Loans to any rating agency rating the obligations of such SPV. For the avoidance of doubt, an SPV that is a trust formed by or at the direction
of a Lender or an Affiliate of a Lender, as depositor, shall be deemed to be an Affiliate of such Lender. Each Lender that sells a participation
shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of
each participant and the principal amounts (and stated interest) of each participant’s interest in the Loans or other obligations under the Loan
Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of
credit or its other obligations under any Loan Document) to any Person other than Agent except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person
whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any
notice to the contrary. For the avoidance of doubt, Agent shall have no responsibility for maintaining a Participant Register.
9.10 Non-Public Information; Confidentiality .
(a) Non-Public Information . Each of Agent, each Lender and L/C Issuer acknowledges and agrees that it may receive material
non-public information (“ MNPI ”) hereunder concerning the Credit Parties and their Affiliates and agrees to use such information in
compliance with all relevant policies, procedures and applicable Requirements of Laws (including United States or Canadian federal, state,
provincial or territorial securities laws and regulations).
(b) Confidential Information . Each Lender, each L/C Issuer and Agent agree to use all reasonable efforts to maintain, in accordance
with its customary practices, the confidentiality of information obtained by it pursuant to any Loan Document and designated in writing by any
Credit Party as confidential, except that such information may be disclosed (i) with the Borrower Representative’s consent, (ii) to Related
Persons of such Lender, L/C Issuer or Agent, as the case may be, or to any Person that any L/C Issuer causes to Issue Letters of Credit
hereunder, that are advised of the confidential nature of such information and are instructed to keep such information confidential in
accordance with the terms hereof, (iii) to the extent such information presently is or hereafter becomes (A) publicly available other than as a
result of a breach of this Section 9.10 or (B) available to such Lender, L/C Issuer or Agent or any of their Related Persons, as the case may be,
from a source (other than any Credit Party) not known by them to be subject to disclosure restrictions, (iv) to the extent disclosure is required
by applicable Requirements of Law or other legal process or requested or demanded by any Governmental Authority, (v) to the extent
necessary or customary for inclusion in league table measurements, (vi) (A) to the National Association of Insurance
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Commissioners, the Insurance Bureau of Canada or any similar organization, any examiner or any nationally recognized rating agency or
(B) otherwise to the extent consisting of general portfolio information that does not identify Credit Parties, (vii) to current or prospective
assignees, SPVs (including the investors or prospective investors therein) or participants, direct or contractual counterparties to any Secured
Rate Contracts and to their respective Related Persons, in each case to the extent such assignees, investors, participants, counterparties or
Related Persons agree to be bound by provisions substantially similar to the provisions of this Section 9.10 (and such Person may disclose
information to their respective Related Persons in accordance with clause (ii) above), (viii) to any other party hereto, and (ix) in connection
with the exercise or enforcement of any right or remedy under any Loan Document, in connection with any litigation or other proceeding to
which such Lender, L/C Issuer or Agent or any of their Related Persons is a party or bound, or to the extent necessary to respond to public
statements or disclosures by Credit Parties or their Related Persons referring to a Lender, L/C Issuer or Agent or any of their Related Persons.
In addition, the Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry and service providers to the Agent and the Lenders in connection with the
administration of this Agreement, the other Loan Documents, and the Commitments. In the event of any conflict between the terms of this
Section 9.10 and those of any other Contractual Obligation entered into with any Credit Party (whether or not a Loan Document), the terms of
this Section 9.10 shall govern.
(c) Tombstones; League Tables . Each Credit Party consents to the publication by Agent or any Lender of any press releases,
tombstones, advertising or other promotional materials (including, via any Electronic Transmission) relating to the financing transactions
contemplated by this Agreement using such Credit Party’s name, product photographs, logo or trademark. Agent or such Lender shall provide a
draft of any such press release, advertising or other material to Borrower Representative for review and comment at least two (2) Business
Days prior to the publication thereof; provided further publication of such information shall not require additional review. Each Lender hereby
consents to the disclosure by Agent or the Lead Arranger of information necessary or customary for inclusion in league table measurements.
(d) Press Release and Related Matters . No Credit Party shall, and no Credit Party shall permit any of its Affiliates to, issue any
press release or other public disclosure (other than any document filed with any Governmental Authority relating to a public offering of
securities of any Credit Party) using the name, logo or otherwise referring to GE Capital or of any of its Affiliates, the Loan Documents or any
transaction contemplated herein or therein to which GE Capital or any of its Affiliates is party without the prior written consent of GE Capital
or such Affiliate (which consent shall not be unreasonably withheld or delayed) except to the extent required to do so under applicable
Requirements of Law and then, only after consulting with GE Capital.
(e) Distribution of Materials to Lenders and L/C Issuers . The Credit Parties acknowledge and agree that the Loan Documents and
all reports, notices, communications and other information or materials provided or delivered by, or on
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behalf of, the Credit Parties hereunder (collectively, the “ Borrower Materials ”) may be disseminated by, or on behalf of, Agent, and made
available, to the Lenders and the L/C Issuers by posting such Borrower Materials on an E-System. The Credit Parties authorize Agent to
download copies of their logos from its website and post copies thereof on an E-System in the same form as is available on such websites.
(f) Material Non-Public Information . The Credit Parties hereby agree that if either they, any parent company or any Subsidiary of
the Credit Parties has publicly traded equity or debt securities in the U.S. or Canada, they shall (and shall cause such parent company or
Subsidiary, as the case may be, to) (i) identify in writing, and (ii) to the extent reasonably practicable, clearly and conspicuously mark such
Borrower Materials that contain only information that is publicly available or that is not material for purposes of U.S. or Canadian federal,
state, provincial and territorial securities laws as “PUBLIC”. The Credit Parties agree that by identifying such Borrower Materials as
“PUBLIC” or publicly filing such Borrower Materials with the Securities and Exchange Commission or other applicable securities
commission, then Agent, the Lenders and the L/C Issuers shall be entitled to treat such Borrower Materials as not containing any MNPI for
purposes of U.S. or Canadian federal, state, provincial and territorial securities laws. The Credit Parties further represent, warrant, acknowledge
and agree that the following documents and materials shall be deemed to be PUBLIC, whether or not so marked, and do not contain any MNPI:
(A) the Loan Documents, including the schedules and exhibits attached thereto, and (B) administrative materials of a customary nature
prepared by the Credit Parties or Agent (including, Notices of Borrowing, Notices of Conversion/Continuation, L/C Requests, U.S. Swingline
Requests and any similar requests or notices posted on or through an E-System). Before distribution of any Borrower Materials, the Credit
Parties agree to execute and deliver to Agent a letter authorizing distribution of the evaluation materials to prospective Lenders and their
employees willing to receive MNPI, and a separate letter authorizing distribution of evaluation materials that do not contain MNPI and
represent that no MNPI is contained therein.
9.11 Set-off; Sharing of Payments .
(a) Right of Setoff . Each of Agent, each Lender, each L/C Issuer and each Affiliate (including each branch office thereof) of any of
them is hereby authorized, without notice or demand (each of which is hereby waived by each Credit Party), at any time and from time to time
during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements of Law, to set off and apply any
and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other
obligations at any time owing by Agent, such Lender, such L/C Issuer or any of their respective Affiliates to or for the credit or the account of
the Borrowers or any other Credit Party against any Obligation of any Credit Party now or hereafter existing, whether or not any demand was
made under any Loan Document with respect to such Obligation and even though such Obligation may be unmatured, provided, however, that
none of the Agent, any Lender or any L/C Issuer may offset amounts owed by it to the Canadian Credit Parties (or any of their Subsidiaries)
against amounts owed to such Person by any of the U.S. Credit Parties. No Lender or
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L/C Issuer shall exercise any such right of setoff without the prior consent of Agent or Required Lenders. Each of Agent, each Lender and each
L/C Issuer agrees promptly to notify the Borrower Representative and Agent after any such setoff and application made by such Lender or its
Affiliates; provided , however , that the failure to give such notice shall not affect the validity of such setoff and application. The rights under
this Section 9.11 are in addition to any other rights and remedies (including other rights of setoff) that Agent, the Lenders, the L/C Issuer, their
Affiliates and the other Secured Parties, may have.
(b) Sharing of Payments, Etc . If any Lender, directly or through an Affiliate or branch office thereof, obtains any payment of any
Obligation of any Credit Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or
“proceeds” (as defined under the applicable UCC or the applicable PPSA in the case of Canadian Collateral) of Collateral) other than pursuant
to Section 9.9 or Article X and such payment exceeds the amount such Lender would have been entitled to receive if all payments had gone to,
and been distributed by, Agent in accordance with the provisions of the Loan Documents, such Lender shall purchase for cash from other
Lenders such participations in their Obligations as necessary for such Lender to share such excess payment with such Lenders to ensure such
payment is applied as though it had been received by Agent and applied in accordance with this Agreement (or, if such application would then
be at the discretion of the Borrowers, applied to repay the Obligations in accordance herewith); provided , however , that (i) if such payment is
rescinded or otherwise recovered from such Lender or L/C Issuer in whole or in part, such purchase shall be rescinded and the purchase price
therefor shall be returned to such Lender or L/C Issuer without interest and (ii) such Lender shall, to the fullest extent permitted by applicable
Requirements of Law, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if
such Lender were the direct creditor of the applicable Credit Party in the amount of such participation. If a Non-Funding Lender receives any
such payment as described in the previous sentence, such Lender shall turn over such payments to Agent in an amount that would satisfy the
cash collateral requirements set forth in Section 1.11(e) .
9.12 Counterparts; Facsimile Signature . This Agreement may be executed in any number of counterparts and by different parties in
separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of
an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a
manually executed counterpart hereof.
9.13 Severability . The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or
agreement required hereunder.
9.14 Captions . The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation
of this Agreement.
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9.15 Independence of Provisions . The parties hereto acknowledge that this Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar matters, and that such limitations, tests and measurements are
cumulative and must each be performed, except as expressly stated to the contrary in this Agreement.
9.16 Interpretation . This Agreement is the result of negotiations among and has been reviewed by counsel to Credit Parties, Agent, each
Lender and other parties hereto, and is the product of all parties hereto. Accordingly, this Agreement and the other Loan Documents shall not
be construed against the Lenders or Agent merely because of Agent’s or Lenders’ involvement in the preparation of such documents and
agreements. Without limiting the generality of the foregoing, each of the parties hereto has had the advice of counsel with respect to Sections
9.18 and 9.19 .
9.17 No Third Parties Benefited . This Agreement is made and entered into for the sole protection and legal benefit of the Borrowers, the
Lenders, the L/C Issuers party hereto, Agent and, subject to the provisions of Section 8.11 , each other Secured Party, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents. Neither Agent nor any Lender shall have any obligation to any
Person not a party to this Agreement or the other Loan Documents.
9.18 Governing Law and Jurisdiction .
(a) Governing Law . The laws of the State of New York shall govern all matters arising out of, in connection with or relating to this
Agreement, including, its validity, interpretation, construction, performance and enforcement (including, any claims sounding in contract or tort
law arising out of the subject matter hereof and any determinations with respect to post-judgment interest).
(b) Submission to Jurisdiction . ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY LOAN DOCUMENT
SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA SITTING IN THE SOUTHERN DISTRICT OF NEW
YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER REPRESENTATIVE AND EACH OTHER
CREDIT PARTY EXECUTING THIS AGREEMENT HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO (AND, TO
THE EXTENT SET FORTH IN ANY OTHER LOAN DOCUMENT, EACH OTHER CREDIT PARTY) HEREBY IRREVOCABLY
WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH JURISDICTIONS.
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(c) Service of Process . EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND
ALL LEGAL PROCESS, SUMMONS, NOTICES AND OTHER DOCUMENTS AND OTHER SERVICE OF PROCESS OF ANY KIND
EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 9.18(C) AND CONSENTS TO SUCH SERVICE IN ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA WITH RESPECT TO OR OTHERWISE ARISING OUT OF OR IN
CONNECTION WITH ANY LOAN DOCUMENT BY ANY MEANS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
INCLUDING BY THE MAILING THEREOF (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID) TO THE ADDRESS OF
THE BORROWER REPRESENTATIVE SPECIFIED HEREIN (AND SHALL BE EFFECTIVE WHEN SUCH MAILING SHALL BE
EFFECTIVE, AS PROVIDED THEREIN). EACH CREDIT PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW.
(d) Non-Exclusive Jurisdiction . NOTHING CONTAINED IN THIS SECTION 9.18 SHALL AFFECT THE RIGHT OF AGENT
OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
9.19 Waiver of Jury Trial . THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY.
THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE.
9.20 Entire Agreement; Release; Survival .
(a) THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDE ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER THEREOF AND ANY PRIOR LETTER OF
INTEREST, COMMITMENT LETTER, CONFIDENTIALITY AND SIMILAR AGREEMENTS INVOLVING ANY CREDIT PARTY AND
ANY LENDER OR ANY L/C ISSUER OR ANY OF THEIR RESPECTIVE AFFILIATES RELATING TO A FINANCING OF
SUBSTANTIALLY SIMILAR FORM, PURPOSE OR EFFECT OTHER THAN THE FEE LETTER. IN THE EVENT OF ANY CONFLICT
BETWEEN THE TERMS OF THIS AGREEMENT AND ANY OTHER LOAN DOCUMENT, THE TERMS OF THIS AGREEMENT
SHALL GOVERN (UNLESS OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN DOCUMENT OR SUCH TERMS OF SUCH
OTHER LOAN DOCUMENTS ARE NECESSARY TO COMPLY WITH APPLICABLE REQUIREMENTS OF LAW, IN WHICH CASE
SUCH TERMS SHALL GOVERN TO THE EXTENT NECESSARY TO COMPLY THEREWITH).
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(b) Execution of this Agreement by the Credit Parties constitutes a full, complete and irrevocable release of any and all claims
which each Credit Party may have at law or in equity in respect of all prior discussions and understandings, oral or written, relating to the
subject matter of this Agreement and the other Loan Documents. In no event shall any Indemnitee be liable on any theory of liability for any
special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings). Each Borrower and each
other Credit Party signatory hereto hereby waives, releases and agrees (and shall cause each other Credit Party to waive, release and agree) not
to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
(c) (i) Any indemnification or other protection provided to any Indemnitee pursuant to this Section 9.20 , Sections 9.5 (Costs and
Expenses) and 9.6 (Indemnity) and Article VIII (Agent) and Article X (Taxes, Yield Protection and Illegality) and (ii) the provisions of
Section 8.1 of each Guaranty and Security Agreement, in each case, shall (x) survive the termination of the Commitments and the payment in
full of all other Obligations and (y) with respect to clause (i) above, inure to the benefit of any Person that at any time held a right thereunder
(as an Indemnitee or otherwise) and, thereafter, its successors and permitted assigns.
9.21 Patriot Act; Anti-Money Laundering Legislation .
(a) Each Credit Party acknowledges that, pursuant to the Patriot Act, the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada) and any regulations under any of the foregoing, and other applicable anti-money laundering, anti-terrorist financing,
government sanction and “know your client” laws, whether within Canada or elsewhere (collectively, including any guidelines or orders
thereunder, “ AML Legislation ”), the Lenders and Agent may be required to obtain, verify and record information regarding each Credit Party,
its respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of such Credit Party, and the
transactions contemplated hereby. The Borrowers shall promptly provide all such information, including the name and address of each Credit
Party and other information that will allow such Lender to identify each Credit Party under any applicable AML Legislation, supporting
documentation and other evidence, as may be reasonably requested by any Lender or Agent, or any prospective assignee or participant of a
Lender or Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence.
(b) If Agent has ascertained the identity of the Credit Parties or any authorized signatories of the Credit Parties for the purposes of
applicable AML Legislation, then Agent:
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(i) shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement”
in such regard between each Lender and Agent within the meaning of applicable AML Legislation; and
(ii) shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as
to its accuracy or completeness.
Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Lenders agrees that Agent has no
obligation to ascertain the identity of the Credit Parties or any authorized signatories of the Credit Parties on behalf of any Lender, or to
confirm the completeness or accuracy of any information it obtains from the Credit Parties or any such authorized signatory in doing so.
9.22 Replacement of Lender . Within forty-five (45) days after: (i) receipt by the Borrower Representative of written notice and demand
from (A) any Lender that is not Agent or an Affiliate of Agent (an “ Affected Lender ”) for payment of additional costs as provided in Sections
10.1 , 10.3 and/or 10.6 or (B) any SPV or participant (an “ Affected SPV/Participant ”) for payment of additional costs as provided in
Section 9.9(f) , unless the option or participation of such Affected SPV/Participant shall have been terminated prior to the exercise by the
Borrowers of their rights hereunder; or (ii) any failure by any Lender (other than Agent or an Affiliate of Agent) to consent to a requested
amendment, waiver or modification to any Loan Document in which Required Lenders have already consented to such amendment, waiver or
modification but the consent of each Lender (or each Lender directly affected thereby, as applicable) is required with respect thereto, the
Borrowers may, at their option, notify (A) in the case of clause (i)(A) or (ii) above, Agent and such Affected Lender (or such non-consenting
Lender) of the Borrowers’ intention to obtain, at the Borrowers’ expense, a replacement Lender (“ Replacement Lender ”) for such Affected
Lender (or such non-consenting Lender), or (B) in the case of clause (i)(B) above, Agent, such Affected SPV/Participant, if known, and the
applicable Lender (such Lender, a “ Participating Lender ”) that (1) granted to such Affected SPV/Participant the option to make all or any part
of any Loan that such Participating Lender would otherwise be required to make hereunder or (2) sold to such Affected SPV/Participant a
participation in or to all or a portion of its rights and obligations under the Loan Documents, of the Borrowers’ intention to obtain, at the
Borrowers’ expense, a Replacement Lender for such Participating Lender, in each case, which Replacement Lender shall be reasonably
satisfactory to Agent. In the event the Borrowers obtain a Replacement Lender within forty-five (45) days following notice of its intention to do
so, the Affected Lender (or such non-consenting Lender) or Participating Lender, as the case may be, shall sell and assign its Loans and
Commitments to such Replacement Lender, at par, provided that the Borrowers have reimbursed such Affected Lender or Affected
SPV/Participant, as applicable, for its increased costs for which it is entitled to reimbursement under this Agreement through the date of such
sale and assignment, and in the case of a Participating Lender being replaced by a Replacement Lender, (x) all right, title and interest in and to
the Obligations and Commitments so assigned to the Replacement Lender shall be assigned free and clear of all Liens or other claims
(including pursuant to the underlying option or
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participation granted or sold to the Affected SPV/Participant, but without affecting any rights, if any, of the Affected SPV/Participant to the
proceeds constituting the purchase price thereof) of the Affected SPV/Participant, and (y) to the extent required by the underlying option or
participation documentation, such Participating Lender shall apply all or a portion of the proceeds received by it as a result of such assignment,
as applicable, to terminate in full the option or participation of such Affected SPV/Participant. In the event that a replaced Lender does not
execute an Assignment pursuant to Section 9.9 within five (5) Business Days after receipt by such replaced Lender of notice of replacement
pursuant to this Section 9.22 and presentation to such replaced Lender of an Assignment evidencing an assignment pursuant to this
Section 9.22 , the Borrowers shall be entitled (but not obligated) to execute such an Assignment on behalf of such replaced Lender, and any
such Assignment so executed by the Borrowers, the Replacement Lender and Agent, shall be effective for purposes of this Section 9.22 and
Section 9.9 . Notwithstanding the foregoing, with respect to a Lender that is a Non-Funding Lender or an Impacted Lender, Agent may, but
shall not be obligated to, obtain a Replacement Lender and execute an Assignment on behalf of such Non-Funding Lender or Impacted Lender
at any time with three (3) Business Days’ prior notice to such Lender (unless notice is not practicable under the circumstances) and cause such
Lender’s Loans and Commitments to be sold and assigned, in whole or in part, at par. Upon any such assignment and payment and compliance
with the other provisions of Section 9.9 , such replaced Lender shall no longer constitute a “Lender” for purposes hereof; provided , any rights
of such replaced Lender to indemnification hereunder shall survive.
9.23 Joint and Several. The obligations of the U.S. Credit Parties hereunder and under the other Loan Documents are joint and several.
Subject to Section 9.24 , the obligations of the Canadian Credit Parties hereunder and under the other Loan Documents are joint and several.
Without limiting the generality of the foregoing, reference is hereby made to Article II of each Guaranty and Security Agreement, to which the
obligations of the Borrowers and the other Credit Parties are subject.
9.24 No Liability of the Canadian Credit Parties for U.S. Obligations . Notwithstanding any provision contained in this Agreement or any
other Loan Document, no Canadian Borrower or Canadian Subsidiary of Holdings shall be responsible or liable for or be deemed to have
guaranteed any of the U.S. Obligations.
9.25 Currency Matters . Principal, interest, reimbursement obligations, fees, and all other amounts payable under this Agreement and the
other Loan Documents by any Person to the Agent or any other Secured Party shall be payable in the currency in which such Obligations are
denominated. Unless stated otherwise, all calculations, comparisons, measurements or determinations under this Agreement shall be made in
Dollars. For the purpose of such calculations, comparisons, measurements or determinations, amounts denominated in other currencies shall be
converted to the U.S. Dollar Equivalent on the date of calculation, comparison, measurement or determination, (a) in the case of calculations of
principal, interest, reimbursement obligations, fees and all other amounts payable under this Agreement and the other Loan Documents by any
Person to the Agent or any other Secured Party, at the exchange rate determined by Agent consistent with the prior practices of Agent,
including the utilization of an average of the current spot rate and the 30-day future rate for such currency and (b) in all other cases, as Agent
may determine in its reasonable discretion.
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9.26 Judgment Currency .
(a) If, for the purpose of obtaining or enforcing judgment against any Credit Party in any court in any jurisdiction, it becomes necessary to
convert into any other currency (such other currency being hereinafter in this Section 9.26 referred to as the “ Judgment Currency ”) an amount
due under any Loan Document in any currency (the “ Obligation Currency ”) other than the Judgment Currency, the conversion shall be made
at the rate of exchange prevailing on the Business Day immediately preceding the date of actual payment of the amount due, in the case of any
proceeding in the courts of the Province of Ontario or in the courts of any other jurisdiction that will give effect to such conversion being made
on such date, or the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable
date as of which such conversion is made pursuant to this Section 9.26 being hereinafter in this Section 9.26 referred to as the “ Judgment
Conversion Date ”).
(b) If, in the case of any proceeding in the court of any jurisdiction referred to in Section 9.26(a) , there is a change in the rate of exchange
prevailing between the Judgment Conversion Date and the date of actual receipt for value of the amount due, the applicable Credit Party or
Credit Parties shall pay such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount
actually received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount
of the Obligation Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount due from any Credit Party under this Section 9.26(b)
shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of any of the
Loan Documents.
(c) The term “rate of exchange” in this Section 9.26 means the rate of exchange at which Agent, on the relevant date at or about 12:00
noon (Toronto time), would be prepared to sell, in accordance with Agent’s normal course foreign currency exchange practices, the Obligation
Currency against the Judgment Currency.
(d) Unless otherwise specified, all references to dollar amounts in this Agreement shall mean Dollars.
9.27 Creditor-Debtor Relationship . The relationship between Agent, each Lender and the L/C Issuer, on the one hand, and the Credit
Parties, on the other hand, is solely that of creditor and debtor. No Secured Party has any fiduciary relationship or duty to any Credit Party
arising out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Secured Parties and the Credit
Parties by virtue of, any Loan Document or any transaction contemplated therein.
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9.28 Actions in Concert . Notwithstanding anything contained herein to the contrary, each Lender hereby agrees with each other Lender
that no Lender shall take any action to protect or enforce its rights against any Credit Party arising out of this Agreement or any other Loan
Document (including exercising any rights of setoff) without first obtaining the prior written consent of Agent or Required Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this Agreement and the other Loan Documents shall be taken in concert
and at the direction or with the consent of Agent or Required Lenders.
9.29 Keepwell . Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to
provide such funds or other support as may be needed from time to time by each other Credit Party to honor all of its obligations under the U.S.
Revolving Guaranty and Security Agreement in respect of Swap Obligations under any Secured Rate Contract (provided, however, that each
Qualified ECP Guarantor shall only be liable under this Section 9.29 for the maximum amount of such liability that can be hereby incurred
without rendering its obligations under this Section 9.29 , or otherwise under the U.S. Revolving Guaranty and Security Agreement, voidable
under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section 9.29 shall remain in full force and effect until the guarantees in respect of Swap
Obligations under each Secured Rate Contract have been discharged, or otherwise released or terminated in accordance with the terms of this
Agreement. Each Qualified ECP Guarantor intends that this Section 9.29 constitute, and this Section 9.29 shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.
ARTICLE X.
TAXES, YIELD PROTECTION AND ILLEGALITY
10.1 Taxes .
(a) Except as required by a Requirement of Law, each payment by any Credit Party under any Loan Document shall be made free
and clear of all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest, additions to tax, penalties or other Liabilities) with respect
thereto (collectively, “ Taxes ”).
(b) If any Taxes shall be required by any Requirement of Law to be deducted from or in respect of any amount payable under any
Loan Document to any Secured Party (i) if such Tax is an Indemnified Tax, such amount payable shall be increased as necessary to ensure that,
after all required deductions for Indemnified Taxes are made (including deductions applicable to any increases to any amount under this
Section 10.1 ), such Secured Party receives the amount it would have received had no such deductions been made, (ii) the relevant Credit Party
shall make such deductions, (iii) the relevant Credit Party shall timely pay the full amount deducted to the relevant
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Governmental Authority in accordance with applicable Requirements of Law and (iv) within thirty (30) days after such payment is made, the
relevant Credit Party shall deliver to Agent an original or certified copy of a receipt evidencing such payment or other evidence of payment
reasonably satisfactory to Agent.
(c) In addition, the Applicable Borrower agrees to pay, and authorizes Agent to pay in its name, any stamp, documentary, excise or
property Tax, charges or similar levies imposed by any applicable Requirement of Law or Governmental Authority and all Liabilities with
respect thereto (including by reason of any delay in payment thereof), in each case arising from the execution, delivery or registration of, or
otherwise with respect to, any Loan Document or any transaction contemplated therein (collectively, “ Other Taxes ”). The Swingline Lender
may, without any need for notice, demand or consent from the Applicable Borrower or the Borrower Representative, by making funds available
to Agent in the amount equal to any such payment, make a U.S. Swingline Loan to the Applicable Borrower in such amount, the proceeds of
which shall be used by Agent in whole to make such payment. Within thirty (30) days after the date of any payment of Other Taxes by any
Credit Party, the Applicable Borrower shall furnish to Agent, at its address referred to in Section 9.2 , the original or a certified copy of a
receipt evidencing payment thereof or other evidence of payment reasonably satisfactory to Agent.
(d) The Credit Parties hereby acknowledge and agree that (i) neither GE Capital nor any Affiliate of GE Capital has provided any
Tax advice to any Tax Affiliate in connection with the transactions contemplated hereby or any other matters and (ii) the Credit Parties have
received appropriate Tax advice to the extent necessary to confirm that the structure of any transaction contemplated by the Credit Parties in
connection with this Agreement complies in all material respects with applicable federal, state and foreign Tax laws.
(e) Without duplication of any amount paid to a Secured Party pursuant to Section 10.1(b) , the Applicable Borrower shall
reimburse and indemnify, within thirty (30) days after receipt of demand therefor (with copy to Agent), each Secured Party for all Indemnified
Taxes (including any Indemnified Taxes imposed by any jurisdiction on amounts payable under this Section 10.1 ) paid or payable by such
Secured Party and any Liabilities arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally
asserted. A certificate of the Secured Party (or of Agent on behalf of such Secured Party) claiming any compensation under this clause (e) ,
setting forth the amounts to be paid thereunder and delivered to the Borrower Representative with copy to Agent, shall be conclusive, binding
and final for all purposes, absent manifest error. In determining such amount, Agent and such Secured Party may use any reasonable averaging
and attribution methods.
(f) Any Lender claiming any additional amounts payable pursuant to this Section 10.1 shall use its reasonable efforts (consistent
with its internal policies and Requirements of Law) to change the jurisdiction of its Lending Office if such a change would reduce any such
additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
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(g) (i) Each Non-U.S. Lender Party that, at any of the following times, is entitled to an exemption from United States withholding
Tax or, after a change in any Requirement of Law, is subject to such withholding Tax at a reduced rate under an applicable Tax treaty, shall
(w) on or prior to the date such Non-U.S. Lender Party becomes a “Non-U.S. Lender Party” hereunder, (x) on or prior to the date on which any
such form or certification expires or becomes obsolete, (y) after the occurrence of any event requiring a change in the most recent form or
certification previously delivered by it pursuant to this clause (i) and (z) from time to time if requested by the Borrower Representative or
Agent (or, in the case of a participant or SPV, the relevant Lender), provide Agent and the Borrower Representative (or, in the case of a
participant or SPV, the relevant Lender) with two completed originals of each of the following, as applicable: (A) Forms W-8ECI (claiming
exemption from U.S. withholding Tax because the income is effectively connected with a U.S. trade or business), W-8BEN or W-8BEN-E
(claiming exemption from, or a reduction of, U.S. withholding Tax) and/or W-8IMY (together with appropriate forms, certifications and
supporting statements) or any successor forms, (B) in the case of a Non-U.S. Lender Party claiming exemption under Sections 871(h) or 881(c)
of the Code, Form W-8BEN or W-8BEN-E (claiming exemption from U.S. withholding Tax) or any successor form and a certificate in form
and substance acceptable to Agent that such Non-U.S. Lender Party is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, (2) a “10 percent shareholder” of the Applicable Borrower within the meaning of Section 881(c)(3)(B) of the Code or (3) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the IRS certifying as to
the entitlement of such Non-U.S. Lender Party to such exemption from United States withholding Tax or reduced rate with respect to all
payments to be made to such Non-U.S. Lender Party under the Loan Documents. Unless the Borrower Representative and Agent have received
forms or other documents satisfactory to them indicating that payments under any Loan Document to or for a Non-U.S. Lender Party are not
subject to United States withholding Tax or are subject to such Tax at a rate reduced by an applicable Tax treaty, the Credit Parties and Agent
shall withhold amounts required to be withheld by applicable Requirements of Law from such payments at the applicable statutory rate.
(ii) Each U.S. Lender Party shall (A) on or prior to the date such U.S. Lender Party becomes a “U.S. Lender Party”
hereunder, (B) on or prior to the date on which any such form or certification expires or becomes obsolete, (C) after the occurrence of any
event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (g) and (D) from time to
time if requested by the Borrower Representative or Agent (or, in the case of a participant or SPV, the relevant Lender), provide Agent and the
Borrower Representative (or, in the case of a participant or SPV, the relevant Lender) with two completed originals of Form W-9 (certifying
that such U.S. Lender Party is entitled to an exemption from U.S. backup withholding Tax) or any successor form.
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(iii) Each Lender having sold a participation in any of its Obligations or identified an SPV as such to Agent shall collect
from such participant or SPV the documents described in this clause (g) and provide them to Agent.
(iv) If a payment made to a Non-U.S. Lender Party would be subject to United States federal withholding Tax imposed by
FATCA if such Non-U.S. Lender Party fails to comply with the applicable reporting requirements of FATCA, such Non-U.S. Lender Party
shall deliver to Agent and the Borrower Representative any documentation under any Requirement of Law or reasonably requested by Agent or
the Borrower Representative sufficient for Agent or Borrowers to comply with their obligations under FATCA and to determine that such
Non-U.S. Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.
Solely for the purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(h) If any Secured Party determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified
Taxes as to which it has been indemnified pursuant to this Section 10.1 (including by the payment of additional amounts pursuant to this
Section 10.1 ), it shall pay to the relevant Credit Party an amount equal to such refund (but only to the extent of indemnity payments made
under this Section 10.1 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such
Secured Party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such
Credit Party, upon the request of such Secured Party, shall repay to such Secured Party the amount paid over pursuant to this Section 10.1(h)
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such Secured Party is required
to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 10.1(h) , in no event shall the
Secured Party be required to pay any amount to a Credit Party pursuant to this Section 10.1(h) the payment of which would place the Secured
Party in a less favorable net after-Tax position than the Secured Party would have been in if the Tax subject to indemnification and giving rise
to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to
such Tax had never been paid. This Section 10.1(h) shall not be construed to require any Secured Party to make available its Tax returns (or
any other information relating to its Taxes that it deems confidential) to the Credit Party or any other Person.
10.2 Illegality . If after the date hereof any Lender shall determine that the introduction of any Requirement of Law, or any change in any
Requirement of Law or in the interpretation or administration thereof, has made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Lender or its Lending Office to make LIBOR Rate Loans or BA Rate Loans, then, on notice
thereof by such Lender to the Borrowers through Agent, the obligation of that Lender to make LIBOR Rate Loans or BA Rate Loans, as
applicable, shall be suspended until such Lender shall have notified Agent and the Borrower Representative that the circumstances giving rise
to such determination no longer exists.
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(a) Subject to clause (c) below, if any Lender shall determine that it is unlawful to maintain any LIBOR Rate Loan or BA Rate
Loan, the Applicable Borrower shall prepay in full all LIBOR Rate Loans or BA Rate Loans, as applicable, of such Lender then outstanding,
together with interest accrued thereon, either on the last day of the Interest Period thereof if such Lender may lawfully continue to maintain
such LIBOR Rate Loans or BA Rate Loans, as applicable, to such day, or immediately, if such Lender may not lawfully continue to maintain
such LIBOR Rate Loans or BA Rate Loans, as applicable, together with any amounts required to be paid in connection therewith pursuant to
Section 10.4 .
(b) If the obligation of any Lender to make or maintain LIBOR Rate Loans or BA Rate Loans has been terminated, the Borrower
Representative may elect, by giving notice to such Lender through Agent that all Loans which would otherwise be made by any such Lender as
LIBOR Rate Loans or BA Rate Loans shall be instead Base Rate Loans or Canadian Index Rate Loans, as applicable.
(c) Before giving any notice to Agent pursuant to this Section 10.2 , the affected Lender shall designate a different Lending Office
with respect to its LIBOR Rate Loans or BA Rate Loans, as applicable, if such designation will avoid the need for giving such notice or making
such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender.
10.3 Increased Costs and Reduction of Return .
(a) If any Lender or L/C Issuer shall determine that, due to either (i) the introduction of, or any change in, or in the interpretation of,
any Requirement of Law or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether
or not having the force of law), in the case of either clause (i) or (ii) subsequent to the date hereof, (x) there shall be any increase in the cost to
such Lender or L/C Issuer of agreeing to make or making, funding or maintaining any LIBOR Rate Loans or BA Rate Loans, or of Issuing or
maintaining any Letter of Credit or (y) the Lender or L/C Issuer shall be subject to any Taxes (other than (A) Indemnified Taxes, (B) Taxes
described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters
of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, then the Applicable
Borrower shall be liable for, and shall from time to time, within thirty (30) days of demand therefor by such Lender or L/C Issuer (with a copy
of such demand to Agent), pay to Agent for the account of such Lender or L/C Issuer, additional amounts as are sufficient to compensate such
Lender or L/C Issuer for such increased costs or such Taxes; provided , that the Applicable Borrower shall not be required to compensate any
Lender or L/C Issuer pursuant to this Section 10.3(a) for any increased costs incurred more than 180 days prior to the date that such Lender or
L/C Issuer notifies the Borrower Representative, in writing of the increased costs and of such Lender’s or L/C Issuer’s intention to claim
compensation thereof; provided , further , that if the circumstance giving rise to such increased costs is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect thereof.
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(b) If any Lender or L/C Issuer shall have determined that:
(i) the introduction of any Capital Adequacy Regulation;
(ii) any change in any Capital Adequacy Regulation;
(iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration thereof; or
(iv) compliance by such Lender or L/C Issuer (or its Lending Office) or any entity controlling the Lender or L/C Issuer, with
any Capital Adequacy Regulation;
affects the amount of capital required or expected to be maintained by such Lender or L/C Issuer or any entity controlling such Lender or L/C
Issuer and (taking into consideration such Lender’s or such entities’ policies with respect to capital adequacy and such Lender’s or L/C Issuer’s
desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitment(s), loans, credits or
obligations under this Agreement, then, within thirty (30) days of demand of such Lender or L/C Issuer (with a copy to Agent), the Applicable
Borrower shall pay to such Lender or L/C Issuer, from time to time as specified by such Lender or L/C Issuer, additional amounts sufficient to
compensate such Lender or L/C Issuer (or the entity controlling the Lender or L/C Issuer) for such increase; provided , that the Applicable
Borrower shall not be required to compensate any Lender or L/C Issuer pursuant to this Section 10.3(b) for any amounts incurred more than
180 days prior to the date that such Lender or L/C Issuer notifies the Borrower Representative, in writing of the amounts and of such Lender’s
or L/C Issuer’s intention to claim compensation thereof; provided , further , that if the event giving rise to such increase is retroactive, then the
180-day period referred to above shall be extended to include the period of retroactive effect thereof.
(c) Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or
the United States of America or foreign regulatory authorities, in each case in respect of this clause (ii) pursuant to Basel III, shall, in each case,
be deemed to be a change in a Requirement of Law under Section 10.3(a) above and/or a change in any Capital Adequacy Regulation under
Section 10.3(b) above, as applicable, regardless of the date enacted, adopted or issued.
10.4 Funding Losses . The U.S. Borrowers (jointly and severally with respect to all Loans) and the Canadian Borrower (with respect to
Loans that are Canadian Obligations) agree to reimburse each Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of:
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(a) the failure of the Borrowers to make any payment or mandatory prepayment of principal of any LIBOR Rate Loan or BA Rate
Loan (including payments made after any acceleration thereof);
(b) the failure of the Borrowers to borrow, continue or convert a Loan after the Borrower Representative has given (or is deemed to
have given) a Notice of Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Borrowers to make any prepayment after the Borrowers have given a notice in accordance with Section 1.7 ;
(d) the prepayment (including pursuant to Section 1.8 ) of a LIBOR Rate Loan or BA Rate Loan on a day which is not the last day
of the Interest Period with respect thereto; or
(e) the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a Base Rate Loan or any BA Rate Loan to a Canadian Index
Rate Loan, as applicable, on a day that is not the last day of the applicable Interest Period;
including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Rate Loans and
BA Rate Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained; provided that, with respect to
the expenses described in clauses (d) and (e) above, such Lender shall have notified Agent of any such expense within two (2) Business Days
of the date on which such expense was incurred. Solely for purposes of calculating amounts payable by the Applicable Borrower to the Lenders
under this Section 10.4 and under Section 10.3(a) : each LIBOR Rate Loan and BA Rate Loan made by a Lender (and each related reserve,
special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBOR or BA Rate, as applicable, used in
determining the interest rate for such LIBOR Rate Loan or BA Rate Loan, as applicable, by a matching deposit or other borrowing in the
interbank Eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Rate Loan or BA Rate Loan,
as applicable, is in fact so funded.
10.5 Inability to Determine Rates . If Agent shall have determined in good faith that for any reason adequate and reasonable means do not
exist for ascertaining the LIBOR or BA Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan or BA Rate Loan,
as applicable, or that the LIBOR or BA Rate applicable pursuant to Section 1.3(a) for any requested Interest Period with respect to a proposed
LIBOR Rate Loan or BA Rate Loan, as applicable, does not adequately and fairly reflect the cost to the Lenders of funding or maintaining such
Loan, Agent will forthwith give notice of such determination to the Borrower Representative and each Lender. Thereafter, the obligation of the
Lenders to make or maintain LIBOR Rate Loans or BA Rate Loans, as applicable, hereunder shall be suspended until Agent revokes such
notice in writing. Upon receipt of such notice, the Borrower Representative may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Borrower Representative does not revoke such notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower Representative, in the amount specified in the applicable notice submitted by the Borrower
Representative, but such Loans shall be made, converted or continued as Base Rate Loans or Canadian Index Rate Loans, as applicable.
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10.6 Reserves on LIBOR Rate Loans . The Applicable Borrower shall pay to each Lender, as long as such Lender shall be required under
regulations of the Federal Reserve Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as “Eurocurrency liabilities”), additional costs on the unpaid principal amount of each LIBOR Rate Loan equal to
actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be
conclusive absent manifest error), payable on each date on which interest is payable on such Loan provided the Borrower Representative shall
have received at least fifteen (15) days’ prior written notice (with a copy to Agent) of such additional interest from the Lender. If a Lender fails
to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest shall be payable fifteen (15) days from
receipt of such notice.
10.7 Certificates of Lenders . Any Lender claiming reimbursement or compensation pursuant to this Article X shall deliver to the
Borrower Representative (with a copy to Agent) a certificate setting forth in reasonable detail the amount payable to such Lender hereunder
and such certificate shall be conclusive and binding on the Borrowers in the absence of manifest error.
ARTICLE XI.
DEFINITIONS
11.1 Defined Terms . The following terms are defined in the Sections or Sections referenced opposite such terms:
“ Acquired Business ”
“ Acquisition Consideration ”
“ Affected Lender ”
“ Affected SPV/Participant ”
“ Agent Report ”
“ Aggregate Excess Funding Amount ”
“ Agreement ”
“ Agreement Currency ”
“ AML Legislation ”
“ Bonds ”
“ Borrower ” and “ Borrowers ”
“ Borrower Materials ”
“ Borrower Representative ”
“ Canadian Borrower ”
“ Canadian L/C Sublimit ”
“ Canadian Letter of Credit ”
Recitals
“ Permitted Acquisition ”
9.22
9.22
8.5(c)
1.11(e)
Preamble
9.26
9.21
Recitals
Preamble
9.10(e)
1.12
Preamble
1.1(b)
1.1(b)
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“ Canadian Revolving Loan ”
“ Canadian Overadvance ”
“ Closing Date Acquisition ”
“ Compliance Certificate ”
“ Concentration Exception Cap ”
“ EBITDA ”
“ Eligible Accounts ”
“ Eligible Inventory ”
“ Event of Default ”
“ Fee Letter ”
“ Fixed Charge Coverage Ratio ”
“ GE Capital ”
“ Holdings ”
“ Indemnified Matters ”
“ Indemnitees ”
“ Indenture ”
“ Intercompany Note ”
“ Investments ”
“ Judgment Conversion Date ”
“ Judgment Currency ”
“ L/C Reimbursement Agreement ”
“ L/C Reimbursement Date ”
“ L/C Request ”
“ L/C Sublimit ”
“ Lead Arranger ”
“ Letter of Credit Fee ”
“ Maximum Canadian Revolving Loan Amount ”
“ Maximum Lawful Rate ”
“ Maximum Revolving Loan Amount ”
“ Maximum U.S. Revolving Loan Amount ”
“ MNPI ”
“ Newly-Established Canadian Accounts ”
“ Notes Collateral Trustee ”
“ Notice of Conversion/Continuation ”
“ Obligation Currency ”
“ OFAC ”
“ Other Lender ”
“ Other Taxes ”
“ Overadvance ”
“ Participating Lender ”
“ Participant Register ”
“ Permitted Liens ”
“ Real Alloy Acquisition ”
“ Real Alloy Recycling ”
“ Register ”
1.1(a)
1.1(a)
Recitals
4.2(b)
1.13(h)
Exhibit 4.2(b)
1.13
1.14
7.1
1.9(a)
Exhibit 4.2(b)
Preamble
Recitals
9.6
9.6
Recitals
5.4(b)
5.4
9.26(a)
9.26(a)
1.1(b)
1.1(b)
1.1(b)
1.1(b)
8.12
1.9(c)
1.1(a)
1.3(d)
1.1(a)
1.1(a)
9.10(a)
4.15
Recitals
1.6(a)
9.26(a)
3.30
1.11(e)
10.1(c)
1.1(a)
9.22
9.9(h)
5.1
Recitals
Preamble
1.4(b)
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“ Restricted Payments ”
“ Replacement Lender ”
“ Revolving Loan ”
“ Sale ”
“ SDN List ”
“ Settlement Date ”
“ Specified Foreign Subsidiarity Indebtedness ”
“ Specified NOL Dividends ”
“ Tax Group ”
“ Tax Returns ”
“ Taxes ”
“ Terrorist Lists ”
“ Tyler Swap ”
“ U.S. Borrower ” and “ U.S. Borrowers ”
“ U.S. Letter of Credit ”
“ U.S. Overadvance ”
“ U.S. Revolving Loan ”
“ U.S. Swingline Loan ”
“ U.S. Swingline Request ”
“ Unused Commitment Fee ”
5.11
9.22
1.1(a)
9.9(b)
3.30
1.11(b)
5.5(m)
5.11(f)
5.11(e)
3.10
10.1(a)
3.30
8.10(c)
Preamble
1.1(b)
1.1(a)
1.1(a)
1.1(c)
1.1(c)
1.9(b)
In addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:
“ ABL Priority Collateral ” means, collectively, (a) the North America ABL Priority Collateral (as defined in the Intercreditor
Agreement) and (b) the Canadian Collateral.
“ Account ” means, as at any date of determination, all “accounts” (as such term is defined in the UCC or PPSA, as applicable) and all
“claims” (for the purposes of the Civil Code of Quebec) of the Credit Parties, including, the unpaid portion of the obligation of a customer of a
Credit Party in respect of Inventory purchased by and shipped to such customer and/or the rendition of services by a Credit Party, as stated on
the respective invoice of a Credit Party, net of any credits, rebates or offsets owed to such customer.
“ Account Debtor ” means the customer of a Credit Party who is obligated on or under an Account.
“ Acquisition ” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of fifty
percent (50%) of the Stock and Stock Equivalents of any Person or otherwise causing any Person to become a Subsidiary of a Borrower, or
(c) a merger, amalgamation or consolidation or any other combination with another Person.
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“ Affiliate ” means, with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other
Person that directly or indirectly controls, is controlled by, or is under common control with, such Person; provided , however , that no Secured
Party shall be an Affiliate of any Credit Party or of any Subsidiary of any Credit Party solely by reason of the provisions of the Loan
Documents. For purposes of this definition, “control” means the possession of either (a) the power to vote, or the beneficial ownership of, 10%
or more of the voting Stock of such Person (either directly or through the ownership of Stock Equivalents) or (b) the power to direct or cause
the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“ Agent ” means GE Capital in its capacity as administrative agent for the Lenders hereunder, and any successor administrative agent.
“ Aggregate Revolving Loan Commitment ” means the combined Revolving Loan Commitments of the Lenders, which shall initially be
in the amount of $110,000,000, as such amount may be reduced from time to time pursuant to this Agreement.
“ Aleris Corporation ” means Aleris Corporation, a Delaware corporation.
“ Applicable Borrower ” means (a) with respect to any U.S. Revolving Loan, U.S. Swingline Loan, U.S. Letter of Credit or other U.S.
Obligation, the U.S. Borrowers and (b) with respect to any Canadian Revolving Loan, Canadian Letter of Credit or other Canadian Obligation,
the Canadian Borrower.
“ Applicable Designee ” shall mean any office, branch or Affiliate of a Lender designated thereby from time to time with the consent of
Agent (which consent shall not be unreasonably withheld, conditioned or delayed) to fund all or any portion of such Lender’s Commitment to
fund Canadian Revolving Loans (including purchasing participations in Letter of Credit Obligations with respect to Canadian Letters of Credit)
under this Agreement. As of the Closing Date, the Applicable Designees of each Lender are set forth on Schedule 1.1(a) (which schedule may
be updated from time to time upon written notice by any Lender to Agent). For all purposes of this Agreement, any designation of an
Applicable Designee by a Lender shall not affect such Lender’s rights and obligations with respect to its Commitment and the Credit Parties,
the other Lenders and Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations
under this Agreement and the other Loan Documents, except as otherwise expressly permitted in this Agreement or in the applicable
addendum.
“ Applicable Margin ” means:
(a) for the period commencing on the Closing Date through and including June 30, 2015 and with respect to Revolving Loans and U.S.
Swingline Loans: (x) if a Base Rate Loan or Canadian Index Rate Loan, three quarters of one percent (0.75%) per annum and (y) if a LIBOR
Rate Loan or BA Rate Loan, one and three quarters of one percent (1.75%) per annum; and
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(b) thereafter, the Applicable Margin shall equal the applicable Base Rate or Canadian Index Rate margin or the applicable LIBOR or BA
Rate margin in effect from time to time adjusted (up or down) prospectively on a quarterly basis as determined by Average Excess Availability
during the Fiscal Quarter immediately preceding such date of determination, commencing July 1, 2015, based on the Fiscal Quarter ending
June 30, 2015. Adjustments in Applicable Margin shall be determined by reference to the table below:
Level
I
II
III
IV
Average Excess
Availability
> $82,500,000
<$82,500,000, but
> $55,000,000
<$55,000,000, but
> $16,500,000
<$16,500,000
Base Rate
Margin/Canadian
Index Rate
Margin
LIBOR Rate
Margin/BA Rate
Margin
0.25 %
1.25 %
0.50 %
1.50 %
0.75 %
1.00 %
1.75 %
2.00 %
The Applicable Margin shall be adjusted from time to time based upon Average Excess Availability as shown in the Applicable Margin
Certificates delivered to Agent from time to time pursuant to Section 4.2(m) . If the Applicable Margin Certificate delivered for a Fiscal
Quarter indicates that the Applicable Margin shall increase or decrease during the following Fiscal Quarter, then on the first day of such
following Fiscal Quarter the Applicable Margin shall be adjusted in accordance therewith; provided , however , that if the Borrowers shall fail
to deliver the Applicable Margin Certificate for a Fiscal Quarter by the date required pursuant to Section 4.2(m) , then, at Agent’s election,
effective as of the first day of the Fiscal Quarter following the end of the Fiscal Quarter for which such Applicable Margin Certificate was to
have been delivered, and continuing through the first day of the calendar month following the date (if ever) when such Applicable Margin
Certificate is delivered, the Applicable Margin shall be the highest Applicable Margin specified in the pricing table set forth above.
Notwithstanding anything herein to the contrary, U.S. Swingline Loans may not be LIBOR Rate Loans.
In the event that any Applicable Margin Certificate delivered pursuant to Section 4.2(m) is inaccurate, and such inaccuracy, if corrected, would
have led to the imposition of a higher Applicable Margin for any Fiscal Quarter than the Applicable Margin applied for that period, then (i) the
Borrowers shall immediately deliver to Agent a corrected Applicable Margin Certificate for that period, (ii) the Applicable Margin for such
Fiscal Quarter shall be determined based on the corrected Applicable Margin Certificate, and (iii) the Borrower shall immediately pay to Agent
(for the account of the Lenders that hold the Commitments and the Loans at the time such payment is received, regardless of whether those
Lenders held the Commitments and Loans during the relevant period) the accrued additional interest owing as a result of such increased
Applicable Margin for that period. This paragraph shall not limit the rights of Agent or the Lenders with respect to Section 1.3(c) and Article
VII hereof, and shall survive the termination of this Agreement until the payment in full in cash of the aggregate outstanding principal balance
of the Loans.
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“ Applicable Margin Certificate ” means a certificate of the Borrower Representative in substantially the form of Exhibit 4.2(m) hereto,
duly completed as of the applicable date under Section 4.2(m) .
“ Applicable Unused Line Fee Rate ” means:
(a) for the period commencing on the Closing Date through and including June 30, 2015, a rate per annum equal to three-eighths of one
percent (0.375%); and
(b) thereafter, a rate per annum determined as set forth below based upon Average Daily Usage Percentage as of the last day of the
applicable calculation period:
Applicable Unused
Line Fee Rate
Average Daily Usage Percentage
Greater than or equal to 50%
Less than 50%
0.25 %
0.375 %
“ Approved Fund ” means, with respect to any Lender, any Person (other than a natural Person) that (a) (i) is or will be engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the Ordinary Course of Business or
(ii) temporarily warehouses loans for any Lender or any Person described in clause (i) above and (b) is advised or managed by (i) such Lender,
(ii) any Affiliate of such Lender or (iii) any Person (other than an individual) or any Affiliate of any Person (other than an individual) that
administers or manages such Lender.
“ Assignment ” means an assignment agreement entered into by a Lender, as assignor, and any Person, as assignee, pursuant to the terms
and provisions of Section 9.9 (with the consent of any party whose consent is required by Section 9.9 ), accepted by Agent, substantially in the
form of Exhibit 11.1(a) or any other form approved by Agent.
“ Attorney Costs ” means all reasonable fees and disbursements of any law firm or other external counsel.
“ Availability ” means, as of any date of determination, the amount by which (a) the Maximum Revolving Loan Amount exceeds (b) the
U.S. Dollar Equivalent of the aggregate outstanding principal balance of Revolving Loans.
“ Average Daily Usage Percentage ” means, for any calendar month, the percentage derived from dividing:
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(a) the average daily balance of the U.S. Dollar Equivalent of all Revolving Loans during the preceding calendar month, by
(b) the average daily balance of the Aggregate Revolving Loan Commitment during the preceding calendar month.
“ Average Excess Availability ” means, as of any date of determination, average daily Excess Availability for the preceding Fiscal
Quarter.
“ BA Rate ” means, in respect of any Interest Period applicable to a BA Rate Loan, the rate per annum determined by Agent by reference
to the average rate quoted on the Reuters Monitor Screen (Page CDOR, or such other Page as may replace such Page on such Screen for the
purpose of displaying Canadian interbank bid rates for Canadian Dollar bankers’ acceptances) applicable to Canadian Dollars bankers’
acceptances with a term comparable to such Interest Period as of 11:00 a.m. (Toronto time) two (2) Business Days before the first day of such
Interest Period. If for any reason the Reuters Monitor Screen rates are unavailable, the BA Rate means the rate of interest determined by Agent
that is equal to the arithmetic mean (rounded upwards to the nearest basis point) of the rates quoted by The Bank of Nova Scotia, Royal Bank
of Canada and Canadian Imperial Bank of Commerce in respect of Canadian Dollar bankers’ acceptances with a term comparable to such
Interest Period. No adjustment shall be made to account for the difference between the number of days in a year on which the rates referred to
in this definition are based and the number of days in a year on the basis of which interest is calculated in the Agreement.
“ BA Rate Loan ” means a Loan denominated in Canadian Dollars that bears interest based on the BA Rate.
“ Bank Product ” shall mean any of the following products, services or facilities provided to any Credit Party or any of its Subsidiaries by
any Bank Product Provider: (a) any services provided from time to time in connection with operating, collections, payroll, trust, or other
depository or disbursement accounts, including automatic clearinghouse, controlled disbursement, depository, electronic funds transfer,
information reporting, lockbox, stop payment, overdraft and/or wire transfer services; (b) commercial credit card and purchasing cards; and
(c) other banking products or services approved by the Agent in writing; provided , however , that, except for Bank Products that have been
provided or arranged by GE Capital or an Affiliate of GE Capital, for any of the foregoing to be included for purposes of a distribution under
Section 1.10(c) and for the purposes of the definition of “Obligations”, the applicable Bank Product Provider and the applicable Credit Party or
Subsidiary must have provided written notice to Agent of (i) the existence of such Bank Product, (ii) the maximum Dollar amount of Bank
Product Obligations arising thereunder, and (iii) the methodology to be used by such parties in determining such amount owing from time to
time.
“ Bank Product Obligations ” means any payment obligations due and owing to any Bank Product Provider from any Credit Party or any
of its Subsidiaries resulting from the provision of Bank Products by any Bank Product Provider to any Credit Party or any of its Subsidiaries.
126
“ Bank Product Provider ” means GE Capital or any of its Affiliates or any other Lender or any of its Affiliates.
“ Bank Product Reserve ” means, at any time of determination, a reserve established by Agent in an amount equal to the obligations and
liabilities of the Credit Parties and their Subsidiaries under Bank Products at such time.
“ Bankruptcy Code ” means the Federal Bankruptcy Reform Act of 1978.
“ Base Rate ” means, for any day, a rate per annum equal to the highest of (a) the rate last quoted by The Wall Street Journal as the “
Prime Rate ” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the
Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate
is no longer quoted therein, any similar rate quoted therein (as determined by Agent) or any similar release by the Federal Reserve Board (as
determined by Agent), (b) the sum of 0.50% per annum and the Federal Funds Rate, and (c) the sum of (x) LIBOR calculated for each such day
based on an Interest Period of one month determined two (2) Business Days prior to such day, plus (y) the excess of the Applicable Margin for
LIBOR Rate Loans over the Applicable Margin for Base Rate Loans, in each instance, as of such day. Any change in the Base Rate due to a
change in any of the foregoing shall be effective on the effective date of such change in the Federal Funds Rate or LIBOR for an Interest Period
of one month.
“ Base Rate Loan ” means a Loan denominated in Dollars that bears interest based on the Base Rate.
“ Benefit Plan ” means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United
States or otherwise) to which any Credit Party incurs or otherwise has any obligation or liability, contingent or otherwise.
“ Borrowing ” means a borrowing hereunder consisting of Loans made to or for the benefit of the Applicable Borrowers on the same day
by the Lenders pursuant to Article I .
“ Borrowing Base Certificate ” means a certificate of the Borrower Representative, on behalf of each Credit Party, in substantially the
form of Exhibit 11.1(b) hereto, duly completed as of a date acceptable to Agent in its sole discretion.
“ Business Day ” means any day that is not a Saturday, Sunday or a day on which banks are required or authorized to close in New York
City and, when determined in connection with notices and determinations in respect of LIBOR or any LIBOR Rate Loan or any funding,
conversion, continuation, Interest Period or payment of any LIBOR Rate Loan, that is also a day on which dealings in Dollar deposits are
carried on in the London interbank market.
127
“ Canadian AML Legislation ” means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Criminal
Code (Canada) and the United Nations Act (Canada) and all regulations or executive orders passed thereunder.
“ Canadian Benefit Plans ” means any plan, fund, program, or policy, whether oral or written, formal or informal, funded or unfunded,
insured or uninsured, providing benefits primarily to Canadian employees, including medical, hospital care, dental, sickness, accident,
disability, life insurance, pension, retirement or savings benefits, under which Borrowers have any liability with respect to any employee or
former employee, but excluding any Canadian Pension Plans.
“ Canadian Borrowing Base ” means, with respect to the Canadian Borrower, as of any date of determination by Agent, from time to
time, an amount equal to the U.S. Dollar Equivalent of the lesser of:
(a) Canadian Revolving Loan Sublimit; and
(b) the sum of (x) 85% of the book value of Eligible Accounts of such Borrower at such time, plus (y) the lesser of (i) 75% of the
book value of Eligible Inventory of such Borrower valued at the lower of cost or market on a first-in, first-out basis, and (ii) 85% of the book
value of Eligible Inventory of such Borrower, valued at the lower of cost or market on a first-in, first-out basis multiplied by the NOLV Factor;
and
in each case less Reserves established by Agent at such time in its Permitted Discretion.
“ Canadian Collateral ” means “Collateral” as defined in the Canadian Revolving Guarantee and Security Agreement and shall include all
rights, titles and interests of the Canadian Credit Parties in, to or under the Mortgaged Properties.
“ Canadian Credit Parties ” means the Canadian Borrower and each Canadian Subsidiary (a) which executes a guaranty of the Canadian
Obligations, (b) which grants a Lien on its Canadian Collateral to secure payment of the Canadian Obligations and (c) all of the Stock of which
is pledged to Agent for the benefit of the Secured Parties.
“ Canadian Defined Benefit Pension Plan ” means a Canadian Pension Plan that contains a “defined benefit provision” as such term is
defined under the Income Tax Act (Canada).
“ Canadian Dollars ” or “ C$ ” shall mean the lawful currency of Canada.
“ Canadian Index Rate ” means, for any day, a floating rate equal to the higher of (a) the annual rate of interest quoted from time to time
in the “Report on Business” section of The Globe and Mail as being “Canadian prime”, “chartered bank prime rate” or words of similar
description; and (b) the BA Rate existing on such day in respect of an interest period of 30 days plus 1.35% per annum. Any change in any
interest rate provided for in the Agreement based upon the Canadian Index Rate shall take effect at the time of such change in the Canadian
Index Rate. No adjustments shall be made to account for the difference between the number of days in a year on which the rates referred to in
this definition are based and the number of days in a year on the basis of which interest is calculated in the Agreement.
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“ Canadian Index Rate Loan ” means a Loan denominated in Canadian Dollars that bears interest at a rate based on the Canadian Index
Rate.
“ Canadian Obligations ” means, subject to Section 9.24 , (a) all Canadian Revolving Loans (including Overadvances with respect
thereto), and other Indebtedness, advances, debts, liabilities, obligations, covenants and duties owing by any Canadian Credit Party to any
Lender, Agent, any L/C Issuer, any Secured Swap Provider or any other Person required to be indemnified, that arises under any Loan
Document or any Secured Rate Contract to which any Canadian Credit Party is a party, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired; provided that
the Canadian Obligations of any Canadian Credit Party that is a Guarantor shall not include any Excluded Rate Contract Obligations solely of
such Canadian Credit Party and (b) all Bank Product Obligations arising from any Bank Products provided to any Canadian Credit Party or any
of its Subsidiaries.
“ Canadian Outstandings ” means, as of any time of determination thereof, the U.S. Dollar Equivalent of the sum (without duplication) of
the aggregate outstanding principal balance at such time of the Canadian Revolving Loans and the aggregate amount of Letter of Credit
Obligations for all Canadian Letters of Credit outstanding at such time.
“ Canadian Pension Plans ” means each pension plan required to be registered under Canadian federal or provincial law that is maintained
or contributed to by a Credit Party primarily for its Canadian employees or former employees, but does not include the Canada Pension Plan or
the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively.
“ Canadian Revolving Guarantee and Security Agreement ” means the Canadian Revolving Guarantee and Security Agreement, dated as
of the Closing Date, made by the Canadian Credit Parties in favor of Agent, for the benefit of the Secured Parties, as the same may be
amended, restated and/or modified from time to time.
“ Canadian Revolving Loan Sublimit ” means, as of any time of the determination thereof, (a) $15,000,000, as such amount may be
reduced from time to time pursuant to Section 1.7 less (b) the amount (if any) by which the U.S. Outstandings at such time exceed an amount
equal to the Aggregate Revolving Loan Commitment at such time less the amount then in effect under clause (a) of this definition.
“ Canadian Subsidiary ” means each Wholly-Owned Subsidiary of Holdings that is organized under the laws of Canada or any province
thereof.
129
“ Capital Adequacy Regulation ” means any guideline, request or directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any Lender or of any
corporation controlling a Lender.
“ Capital Lease ” means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such
Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with
GAAP.
“ Capital Lease Obligations ” means, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback
transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or
other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.
“ Capped Indebtedness Reserve ” means, if at any time the (a) sum of the outstanding principal amount of (i) the Obligations and
(ii) Specified Foreign Subsidiary Indebtedness exceeds (b) $121,000,000, a Reserve in an amount equal to such positive excess amount at such
time, until such excess is eliminated.
“ Cash Equivalents ” means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guarantied or insured
by the United States or Canadian federal government or (ii) issued by any agency of the United States or Canadian federal government the
obligations of which are fully backed by the full faith and credit of the United States federal government or constitute a charge upon the
Consolidated Revenue Fund of Canada, as applicable, (b) any readily-marketable direct obligations issued by any other agency of the United
States or Canadian federal government, any state, province or territory thereof or any political subdivision of any such state, province or
territory thereof or any public instrumentality thereof, in each case having a rating of at least “A-1” from S&P or at least “P-1” from Moody’s,
(c) any commercial paper rated at least “ A-1 ” by S&P or “ P-1 ” by Moody’s and issued by any Person organized under the laws of any state
of the United States or Canada or any province or territory thereof, (d) any Dollar-denominated or Canadian Dollar-denominated time deposit,
insured certificate of deposit, overnight bank deposit or bankers’ acceptance issued or accepted by (i) any Lender or (ii) any other commercial
or chartered bank that is (A) organized under the laws of the United States or Canada, any state thereof or the District of Columbia,
(B) “adequately capitalized” (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in
such regulations) in excess of $250,000,000 and (e) shares of any United States or Canadian money market fund that (i) has substantially all of
its assets invested continuously in the types of investments referred to in clause (a) , (b) , (c) or (d) above with maturities as set forth in the
proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s the highest rating obtainable for
money market funds in the United States or Canada; provided , however , that the maturities of all obligations specified in any of clauses (a) ,
(b) , (c) or (d) above shall not exceed 365 days.
130
“ Closing Date ” means February 27, 2015.
“ Closing Date Equity Transaction ” means, collectively, issuances by the Sponsor of its common Stock (including rights to purchase
common Stock) and preferred Stock, the sale by the Sponsor of North American Breaker Co., LLC and related transactions, at least
$175,000,000 (less the amount, if any, of up to $60,000,000 of the preferred Stock of the Sponsor issued to Aleris Corporation) of the
aggregate net proceeds of which are contributed in cash to Real Alloy Acquisition on or before the Closing Date in the form of common equity
Stock of Real Alloy Acquisition to finance a portion of Closing Date Acquisition.
“ Closing Date Equity Transaction Documents ” means, collectively, (a) the Purchase Agreement, (b) that certain Amended and Restated
Backstop Agreement, dated as of January 26, 2015, by and between Aleris Corporation and Sponsor and (c) that certain Purchase Agreement
dated as of January 9, 2015 by and among SGGH, LLC, a Delaware limited liability company, as Seller, Sponsor, as Parent, North American
Breaker Co., LLC, a California limited liability company, as the Company, NABCO Holding Company, LLC, a Delaware limited liability
company, as Purchaser, and North American Breaker Co., Inc., a New Brunswick corporation, as Canadian Purchaser, each as amended,
amended and restated, supplemented or otherwise modified from time to time in accordance with this Agreement.
“ Closing Date Material Adverse Effect ” means a Material Adverse Effect (as defined in the Purchase Agreement).
“ Code ” means the Internal Revenue Code of 1986.
“ Collateral ” means, collectively, the U.S. Collateral and the Canadian Collateral.
“ Collateral Documents ” means, collectively, each Guaranty and Security Agreement, the Mortgages, each Control Agreement, the
Foreign Pledge Agreements, and all other security agreements, pledge agreements, patent and trademark security agreements, lease
assignments, guaranties and other similar agreements, and all amendments, restatements, modifications or supplements thereof or thereto, by or
between any one or more of any Credit Party, any of their respective Subsidiaries or any other Person pledging or granting a lien on Collateral
or guarantying the payment and performance of the Obligations, and any Lender or Agent for the benefit of Agent, the Lenders and other
Secured Parties now or hereafter delivered to the Lenders or Agent pursuant to or in connection with the transactions contemplated hereby, and
all financing statements (or comparable documents now or hereafter filed in accordance with the UCC, the PPSA or comparable law) against
any such Person as debtor in favor of any Lender or Agent for the benefit of Agent, the Lenders and the other Secured Parties, as secured party,
as any of the foregoing may be amended, restated and/or modified from time to time.
“ Collateral Trust Hedging Obligations ” means the “Collateral Trust Hedging Obligations” (as defined in the Intercreditor Agreement).
131
“ Collection Account ” means the Agent’s deposit account for payments, as set forth on Agent’s signature page hereto, or such other
account as may be specified in writing by Agent as the “Collection Account.”
“ Commitment ” means, for each Lender, its Revolving Loan Commitment.
“ Commitment Percentage ” means, as to any Lender, the percentage equivalent of such Lender’s Revolving Loan Commitment, divided
by the Aggregate Revolving Loan Commitment; provided that following the termination of the Aggregate Revolving Loan Commitment, such
term means, as to any Lender, the percentage equivalent of the principal amount of the Loans held by such Lender, divided by the aggregate
principal amount of the Loans held by all Lenders.
“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq .).
“ Commodity Hedging Agreements ” shall any commodity contracts, including futures contracts, forward contracts, options and other
commodity related derivative transactions or other arrangements similar to the foregoing or other arrangements designed to protect against
fluctuations in commodity prices.
“ Concentration Account ” means a concentration deposit account constituting a Control Account at a financial institution acceptable to
Agent, which, as of the Closing Date, shall be that certain deposit account maintained by the Borrower Representative, with Wintrust Bank,
identified as account number 3805704386.
“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or
that are franchise Taxes or branch profit Taxes.
“ Contingent Obligation ” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person: (a) with respect
to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with
respect thereto; (b) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings; (c) under any Rate Contracts or any Commodity Hedging Agreements; (d) to make take-or-pay or similar
payments if required regardless of nonperformance by any other party or parties to an agreement; or (e) for the obligations of another Person
through any agreement to purchase, repurchase or otherwise acquire such obligation or any Property constituting security therefor, to provide
funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of
income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guarantied or otherwise
supported or, if not a fixed and determined amount, the maximum amount reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good faith.
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“ Contractual Obligations ” means, as to any Person, any provision of any security (whether in the nature of Stock, Stock Equivalents or
otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document
or agreement (other than a Loan Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its
Property is subject.
“ Control Account ” means (a) the Concentration Account and (b) any other deposit account (including all lockbox and similar
arrangements) now or hereafter owned by any Credit Party that is not an Excluded Account.
“ Control Agreement ” means, with respect to any Control Account of any Credit Party or any securities entitlement or commodity
contract of any Credit Party, a written agreement, in form and substance satisfactory to Agent, among Agent, the Notes Collateral Trustee, the
depository or other financial institution or other Person at which such account is maintained or with which such entitlement or contract is
carried and such Credit Party that is effective for Agent to obtain “control” (within the meaning of Articles 8 and 9 of the applicable UCC or
the comparable provisions of the PPSA, as applicable) of such account.
“ Conversion Date ” means any date on which the Applicable Borrower convert a Base Rate Loan or Canadian Index Rate Loan, as
applicable, to a LIBOR Rate Loan or BA Rate Loan, as applicable, or a LIBOR Rate Loan or BA Rate Loan, as applicable, to a Base Rate Loan
or Canadian Index Rate Loan, as applicable.
“ Copyrights ” means all United States and foreign copyrights (whether or not the underlying works of authorship have been published),
including copyrights in Software and all rights in and to databases, all designs (including industrial designs, Protected Designs within the
meaning of 17 U.S.C. 1301 et seq . and Community designs), and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act),
whether registered or unregistered, as well as all moral rights, reversionary interests, and termination rights, and, with respect to any and all of
the foregoing, all registrations and applications therefor and all related IP Ancillary Rights.
“ CRA ” means the Canada Revenue Agency.
“ Credit Parties ” means (a) each U.S. Credit Party, (b) each Canadian Credit Party and (c) each other Person (i) which executes a
guaranty of the Obligations, (ii) which grants a Lien on all or substantially all of its assets to secure payment of the Obligations and (iii) all of
the Stock of which is pledged to Agent for the benefit of the Secured Parties.
“ Default ” means any event or circumstance that, with the passing of time or the giving of notice or both, would (if not cured or
otherwise remedied during such time) become an Event of Default.
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“ Disbursement Account ” means any Control Account (other than Excluded Accounts) that is used solely by the Credit Party owning
such Control Account to make disbursements by such Credit Party to other Persons and is not used to collect any payments to any Credit Party
under any Account, Payment Intangible or other Collateral or for the deposit of any Cash Receipts (other than during any period of time when
there are no Revolving Loans, L/C Reimbursement Obligations or U.S. Swingline Loans outstanding).
“ Disposition ” means (a) the sale, lease, conveyance or other disposition of Property, other than sales or other dispositions expressly
permitted under Sections 5.2(a) , 5.2(c) , 5.2(d) , 5.2(e) , 5.2(f) , 5.2(g) , 5.2(h) and 5.2(i) , and (b) the sale or transfer by a Borrower or any
Subsidiary of a Borrower of any Stock or Stock Equivalent issued by any Subsidiary of a Borrower and held by such transferor Person.
“ Disqualified Stock ” means any Stock or Stock Equivalent which, by its terms (or by the terms of any security or other Stock into which
it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the
date that is ninety-one (91) days following the date specified in clause (a) of the definition of Revolving Termination Date (excluding any
provisions requiring redemption upon a “change of control” or similar event; provided that such “change of control” or similar event results in
the prior payment in full in cash of the Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto
has been asserted), the termination of all commitments to lend hereunder and the termination of this Agreement), (b) is convertible into or
exchangeable for (i) debt securities or (ii) any Stock or Stock Equivalents referred to in (a) above, in each case, at any time on or prior to the
date that is ninety-one (91) days following the date specified in clause (a) of the definition of Revolving Termination Date, or (c) is entitled to
receive scheduled dividends or distributions in cash prior to the time that the Obligations (other than contingent indemnification obligations to
the extent no claim giving rise thereto has been asserted) are paid in full in cash.
“ Dollars ”, “ dollars ” and “ $ ” each mean the lawful money of the United States of America.
“ Domestic Subsidiary ” means any Subsidiary other than a Foreign Subsidiary.
“ Dominion Period ” means any period (a) commencing on the date on which (i) an Event of Default has occurred and is continuing or
(ii) Availability as of any date is less than the greater of $16,500,000 and 15% of the Aggregate Revolving Loan Commitment and (b) ending
on (i) in the case of a Dominion Period beginning under clause (a)(i) , the date on which such Event of Default shall have ceased to continue or
(ii) in the case of a Dominion Period beginning under clause (a)(ii) , the first date on which Availability shall have been at least equal to the
greater of $16,500,000 and 15% of the Aggregate Revolving Loan Commitment for a period of 60 consecutive calendar days.
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“ Electronic Transmission ” means each document, instruction, authorization, file, information and any other communication transmitted,
posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from an E-System.
“ Environmental Laws ” means all applicable and binding present and future Requirements of Law and Permits imposing liability or
standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural
resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.
“ Environmental Liabilities ” means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses
of investigation and feasibility studies, including the related cost of environmental consultants and the cost of attorney’s fees) that may be
imposed on, incurred by or asserted against any Credit Party or any Subsidiary of any Credit Party as a result of, or related to, any claim, suit,
action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law or otherwise, arising under any Environmental Law or in connection with any environmental, health or safety
condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of property by any Credit
Party or any Subsidiary of any Credit Party, whether on, prior or after the date hereof.
“ Equipment ” means all “ equipment ,” as such term is defined in the UCC, now owned or hereafter acquired by any Credit Party,
wherever located.
“ERISA ” means the Employee Retirement Income Security Act of 1974.
“ ERISA Affiliate ” means, collectively, any Credit Party and any Person under common control or treated as a single employer with, any
Credit Party, within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“ ERISA Event ” means any of the following: (a) a reportable event described in Section 4043(b) of ERISA (or, unless the 30-day notice
requirement has been duly waived under the applicable regulations, Section 4043(c) of ERISA) with respect to a Title IV Plan; (b) the
withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or treatment of a plan
amendment as termination) under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan (or treatment of a
plan amendment as termination) under Section 4041 of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer
Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition
of a Lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or
personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status
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under Section 401 or 501 of the Code; (j) a Title IV plan is in “ at risk ” status within the meaning of Code Section 430(i); (k) a Multiemployer
Plan is in “ endangered status ” or “ critical status ” within the meaning of Section 432(b) of the Code; and (l) any other event or condition that
might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the imposition of any material liability upon any ERISA Affiliate under Title IV of
ERISA other than for PBGC premiums due but not delinquent.
“ Event of Loss ” means, with respect to any Property, any of the following: (a) any loss, destruction or damage of such Property; or
(b) any condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such
Property or the requisition of the use of such Property.
“ Excess Availability ” means, as of any date of determination, the amount by which (a) the Maximum Revolving Loan Amount exceeds
(b) the aggregate outstanding principal balance of Revolving Loans.
“ Excluded Account ” means any deposit account now or hereafter owned by any Credit Party that is used solely by such Credit Party
(a) as a payroll account so long as such payroll account is a zero balance account, (b) as a petty cash account so long as the aggregate amount
on deposit in all petty cash accounts of the Credit Parties does not exceed $50,000 at any one time for all such deposit accounts combined,
(c) commodity trading accounts or other brokerage accounts holding customary initial deposits and margin deposits securing obligations under
Rate Contracts and Commodity Hedging Agreements incurred in the Ordinary Course of Business and not for speculative purposes so long as
the aggregate amount on deposit in all such accounts of the Credit Parties does not exceed $2,000,000 at any one time for all such deposit
accounts combined, (d) to hold amounts required to be paid in connection with workers compensation claims, unemployment insurance, social
security benefits and other similar forms of governmental insurance benefits, (e) to hold amounts which are required to be pledged or otherwise
provided as security as required by law or pension requirement, or (f) as a withholding tax or fiduciary account.
“ Excluded Domestic Subsidiary ” means any Domestic Subsidiary that is a direct or indirect Subsidiary of an Excluded Foreign
Subsidiary.
“ Excluded Equity Issuance ” means an issuance of (a) Stock or Stock Equivalents by Holdings to management or employees of a Credit
Party under any employee stock option or stock purchase plan or other employee benefits plan in existence from time to time, (b) Stock or
Stock Equivalents by a Wholly-Owned Subsidiary of a Borrower to a Borrower or another Wholly-Owned Subsidiary of a Borrower
constituting an Investment permitted hereunder, (c) Stock or Stock Equivalents by a Wholly-Owned Subsidiary of Holdings to Holdings or
another Wholly-Owned Subsidiary of Holdings constituting an Investment permitted hereunder, (d) so long as no Event of Default has occurred
and is continuing or would result therefrom, Stock or Stock Equivalents by Holdings to the Sponsor or any other equityholder of Holdings as of
the Closing Date, and (e) Stock or Stock Equivalents by a Foreign Subsidiary of such Foreign Subsidiary to qualify directors where required
pursuant to a Requirement of Law or to satisfy other requirements of applicable law, in each instance, with respect to the ownership of Stock of
Foreign Subsidiaries.
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“ Excluded Foreign Subsidiary ” means (a) a Foreign Subsidiary that has not guaranteed or pledged any of its assets to secure, or with
respect to which there shall not have been pledged two-thirds or more of the voting Stock and Stock Equivalents to secure, any Indebtedness
(other than the Loans) of a U.S. Credit Party or any other Subsidiary of Holdings which is a United States person within the meaning of
Section 7701(a)(30) of the Code or (b) a Subsidiary owned by a Foreign Subsidiary described in clause (a) .
“ Excluded Rate Contract Obligation ” means, with respect to any Guarantor, any guarantee of any Swap Obligations under a Secured
Rate Contract if, and only to the extent that and for so long as, all or a portion of the guarantee of such Guarantor of, or the grant by such
Guarantor of a security interest to secure, such Swap Obligation under a Secured Rate Contract (or any guarantee thereof) is or becomes illegal
under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “ eligible contract participant ” as
defined in the Commodity Exchange Act at the time the guarantee of such Guarantor or the grant of such security interest becomes effective
with respect to such Swap Obligation under a Secured Rate Contract. If a Swap Obligation under a Secured Rate Contract arises under a master
agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation under a Secured Rate
Contract that is attributable to swaps for which such guarantee or security interest is or becomes illegal.
“ Excluded Tax ” means with respect to any Secured Party: (a) Taxes measured by net income (including branch profit Taxes) and
franchise Taxes imposed in lieu of net income Taxes, in each case (i) imposed on any Secured Party as a result of being organized under the
laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax
(or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) any United States federal or Canadian withholding Taxes to
the extent that the obligation to withhold amounts existed on the date that such Person became a Secured Party under this Agreement in the
capacity under which such Person makes a claim under Section 10.1(b) or designates a new Lending Office, except in each case to the extent
such Person is a direct or indirect assignee (other than pursuant to Section 9.22 ) of any other Secured Party that was entitled, at the time the
assignment to such Person became effective, to receive additional amounts under Section 10.1(b) ; (c) Taxes that are directly attributable to the
failure (other than as a result of a change in any Requirement of Law) by any Secured Party to deliver the documentation required to be
delivered pursuant to Section 10.1(g) ; and (d) any United States federal withholding Taxes imposed under FATCA.
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“ Exigent Circumstances ” means circumstances that Agent, in its Permitted Discretion, believes render necessary or appropriate the
imposition of Reserves, adjustment of eligibility criteria or establishment of new criteria, as applicable, to, amongst other things, prevent or
mitigate fraud in respect of any Borrowing Base Certificate or the Collateral or the destruction of, physical harm to, impairment of the
Collateral or the rights and interests of the Secured Parties therein (including any loss of priority of the Liens of Agent, for the benefit of the
Secured Parties).
“ Existing Letters of Credit ” means each of the letters of credit issued prior to the Closing Date and described by applicant, date of
issuance, letter of credit number, undrawn amount and date of expiry on Schedule C hereto, including any modifications, extensions or
renewals of any Existing Letter of Credit.
“ E-Fax ” means any system used to receive or transmit faxes electronically.
“ E-Signature ” means the process of attaching to or logically associating with an Electronic Transmission an electronic symbol,
encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Electronic
Transmission) with the intent to sign, authenticate or accept such Electronic Transmission.
“ E-System ” means any electronic system approved by Agent, including Syndtrak ® , Intralinks ® and ClearPar ® and any other Internet
or extranet-based site, whether such electronic system is owned, operated or hosted by Agent, any of its Related Persons or any other Person,
providing for access to data protected by passcodes or other security system.
“ Factoring Facility ” means the factoring facility between Real Alloy Germany and the Factoring Facility Purchaser under the Factoring
Facility Documents with a maximum financing amount of €50,000,000.
“ Factoring Facility Documents ” means, collectively, (a) that certain Factoring Agreement between Real Alloy Germany and the
Factoring Facility Purchaser, including each addendum and schedule thereto, (b) that certain Pledge of Account and Trust Agreement between
Real Alloy Germany and the Factoring Facility Purchaser and (c) all documents delivered to the Factoring Facility Purchaser in connection
with any of the foregoing, in each case, as amended, amended and restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.
“ Factoring Facility Purchaser ” means GE Capital Bank AG.
“ FATCA ” means Sections 1471, 1472, 1473 and 1474 of the Code, as of the date of this Agreement (or any amended or successor
version that is substantively comparable and not materially more onerous to comply with), current or future United States Treasury Regulations
promulgated thereunder and published guidance with respect thereto, and any agreements entered into pursuant to Section 1471(b)(1) of the
Code.
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“ Federal Flood Insurance ” means federally backed Flood Insurance available under the National Flood Insurance Program to owners of
real property improvements located in Special Flood Hazard Areas in a community participating in the National Flood Insurance Program.
“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as
determined by Agent in a commercially reasonable manner.
“ Federal Reserve Board ” means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal
functions.
“ FEMA ” means the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that
administers the National Flood Insurance Program.
“ Final Availability Date ” means the earlier of the Revolving Termination Date and one (1) Business Day prior to the date specified in
clause (a) of the definition of Revolving Termination Date.
“ FIRREA ” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
“ Fiscal Quarter ” means any of the quarterly accounting periods of the Credit Parties, ending on March 31, June 30, September 30 and
December 31 of each year.
“ Fiscal Year ” means any of the annual accounting periods of the Credit Parties ending on December 31 of each year.
“ Flood Insurance ” means, for any Real Estate located in a Special Flood Hazard Area, Federal Flood Insurance or private insurance
reasonably satisfactory to Agent, in either case, that (a) meets the requirements set forth by FEMA in its Mandatory Purchase of Flood
Insurance Guidelines, (b) shall include a deductible not to exceed $50,000 and (c) shall have a coverage amount equal to the lesser of (i) the “
replacement cost value ” of the buildings and any personal property Collateral located on the Real Estate as determined under the National
Flood Insurance Program or (ii) the maximum policy limits set under the National Flood Insurance Program.
“ Foreign Pledge Agreements ” means, collectively, (a) that certain Share Pledge Agreement entered into between Real Alloy
Acquisition, as pledgor, and the Agent, as pledgee, relating to 100% of the non-voting shares and 65% of the voting shares of Evergreen
Holding Germany GmbH, (b) that certain Share Pledge Agreement entered into between Real Alloy Acquisition, as pledgor, and the Agent, as
pledgee, relating to 35% of the voting shares of Evergreen Holding Germany GmbH, (c) that certain Share Charge entered into between Real
Alloy Acquisition, as pledgor, and the Agent relating to 65% of the shares of Real Alloy UK Holdco Ltd. (d) that certain Share Charge entered
into between Real Alloy Acquisition, as pledgor, and the Agent relating to 35% of the
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shares of Real Alloy UK Holdco Ltd., (e) that certain Partnership Interest Pledge Agreement entered into between Real Alloy Acquisition, as
pledgor, and the Agent, as pledgee, relating to 65% of the capital of Real Alloy Mexico Holdco S. de R.L. de C.V., (f) that certain Partnership
Interest Pledge Agreement entered into between Real Alloy Acquisition, as pledgor, and the Agent, as pledgee, relating to 34.9999% of the
capital of Real Alloy Mexico Holdco S. de R.L. de C.V., and (g) that certain Partnership Interest Pledge Agreement entered into between RA
Mexico Holding, LLC, as pledgor, and the Agent, as pledgee, relating to 0.0001% of the capital of Real Alloy Mexico Holdco S. de R.L. de
C.V., as each of the foregoing may be amended, restated and/or modified from time to time.
“ Foreign Subsidiary ” means, with respect to any Person, a Subsidiary of such Person that is a “ controlled foreign corporation ” under
Section 957 of the Code.
“ GAAP ” means generally accepted accounting principles in the United States of America, as in effect from time to time, set forth in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements
and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions and comparable stature and authority
within the accounting profession) that are applicable to the circumstances as of the date of determination. Subject to Section 11.3 , all
references to “ GAAP ” shall be to GAAP applied consistently with the principles used in the preparation of the financial statements described
in Section 3.11(a) .
“ GECM ” means GE Capital Markets, Inc.
“ Governmental Authority ” means any nation, sovereign or government, any state, province, territory or other political subdivision
thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory
or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public
sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization
(including the National Association of Insurance Commissioners).
“ Guaranty and Security Agreement ” means each of the U.S. Revolving Guaranty and Security Agreement and the Canadian Revolving
Guarantee and Security Agreement.
“ Guarantor ” means any Person that has guaranteed any of the Obligations.
“ Hazardous Material ” means any substance, material or waste that is classified, regulated or otherwise characterized under any
Environmental Law as hazardous, toxic, a contaminant or a pollutant, including, petroleum or any fraction thereof, asbestos, polychlorinated
biphenyls and radioactive substances.
“ Holding Companies ” means Holdings and Real Alloy Acquisition and “ Holding Company ” means each such Person.
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“ IMSAMET of Arizona ” means IMSAMET of Arizona, an Arizona general partnership.
“ Impacted Lender ” means any Lender that fails to provide Agent, within three (3) Business Days following Agent’s written request,
satisfactory assurance that such Lender will not become a Non-Funding Lender.
“ Indebtedness ” of any Person means, without duplication: (a) all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of Property or services (other than trade payables entered into in the Ordinary Course of
Business); (c) the face amount of all letters of credit issued for the account of such Person and without duplication, all drafts drawn thereunder
and all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments issued by such
Person; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of Property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to Property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property); (f) all Capital
Lease Obligations; (g) the principal balance outstanding under any synthetic lease, off-balance sheet loan or similar off balance sheet financing
product; (h) all obligations of such Person, whether or not contingent, in respect of Disqualified Stock, valued at, in the case of redeemable
preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and
unpaid dividends; (i) all indebtedness referred to in clauses (a) through (h) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contracts rights) owned
by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; and (j) all Contingent
Obligations described in clause (a) of the definition thereof in respect of indebtedness or obligations of others of the kinds referred to in
clauses (a) through (i) above.
“ Indenture Documents ” means the “Indenture Pari Passu Lien Debt Documents” (as defined in the Intercreditor Agreement), as
amended, amended and restated, refinanced, supplemented or otherwise modified in accordance with this Agreement and the Intercreditor
Agreement.
“ Indemnified Tax ” means (a) any Tax, other than an Excluded Tax, imposed upon or with respect to any payment made by or on
account of any Credit Party under any Loan Document, and (b) to the extent not otherwise described in clause (a), Other Taxes.
“ Insolvency Proceeding ” means (a) any case, action or proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, statutory management,
administration, suspension of general operations, creditor scheme of arrangement or similar arrangement, or (b) any general assignment for the
benefit of
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creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each case in (a) and (b) above, undertaken under U.S. federal, state or foreign law, including the Bankruptcy Code,
the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act
(Canada).
“ Intellectual Property ” means all rights, title and interests in or relating to intellectual property and industrial property arising under any
Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Software, Trademarks, Internet Domain
Names, Trade Secrets and IP Licenses.
“ Intercreditor Agreement ” means that certain Intercreditor Agreement dated as of the date hereof, by and between Agent and Notes
Collateral Trustee, and acknowledged and agreed to by Holdings, Real Alloy Acquisition and certain of its Subsidiaries party thereto, as the
same may be amended, supplemented, restated, replaced and/or modified from time to time subject to the terms thereof.
“ Interest Payment Date ” means, (a) with respect to any LIBOR Rate Loan or BA Rate Loan (other than a LIBOR Rate Loan or BA Rate
Loan having an Interest Period of six (6) months) the last day of each Interest Period applicable to such Loan, (b) with respect to any LIBOR
Rate Loan or BA Rate Loan having an Interest Period of six (6) months, the last day of each three (3) month interval and, without duplication,
the last day of such Interest Period, and (c) with respect to Base Rate Loans (including U.S. Swingline Loans) or Canadian Index Rate Loans
the first day of each month.
“ Interest Period ” means, with respect to any LIBOR Rate Loan or BA Rate Loan, the period commencing on the Business Day such
Loan is disbursed or continued or on the Conversion Date on which a Base Rate Loan is converted to such LIBOR Rate Loan or a Canadian
Index Rate Loan is converted to such BA Rate Loan, as applicable, and ending on the date one, two, three, or six months thereafter, as selected
by the Borrower Representative in its Notice of Borrowing or Notice of Conversion/Continuation; provided that:
(a) if any Interest Period pertaining to a LIBOR Rate Loan or BA Rate Loan would otherwise end on a day which is not a Business Day,
that 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;
(b) any Interest Period pertaining to a LIBOR Rate Loan or BA Rate Loan 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 the calendar month at the end of such Interest Period; and
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(c) no Interest Period for any Revolving Loan shall extend beyond the Revolving Termination Date.
“ Internet Domain Name ” means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in
or relating to internet domain names.
“ Inventory ” means all of the “ inventory ” (as such term is defined in the UCC or the PPSA, as applicable) of the Credit Parties,
including, but not limited to, all merchandise, raw materials, parts, supplies, work-in-process and finished goods intended for sale, together
with all the containers, packing, packaging, shipping and similar materials related thereto, and including such inventory as is temporarily out of
a Credit Party’s custody or possession, including inventory on the premises of others and items in transit.
“ IP Ancillary Rights ” means, with respect to any Intellectual Property, as applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all
income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise
with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement,
misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.
“ IP License ” means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and
interest in or relating to any Intellectual Property.
“ IRS ” means the Internal Revenue Service of the United States and any successor thereto.
“ Issue ” means, with respect to any Letter of Credit, to issue, extend the expiration date of, renew (including by failure to object to any
automatic renewal on the last day such objection is permitted), increase the face amount of, or reduce or eliminate any scheduled decrease in
the face amount of, such Letter of Credit, or to cause any Person to do any of the foregoing. The terms “ Issued ”, “ Issuance ” and “ Issuer ”
have correlative meanings.
“ L/C Issuer ” shall mean (a) any Lender, (b) an Affiliate of any Lender, (c) any Person designated by an L/C Issuer from time to time to
issue all or any portion of the Canadian Letters of Credit requested to be issued by such L/C Issuer under this Agreement and listed on
Schedule 1.1(a) (which schedule may be updated from time to time upon written notice by any L/C Issuer to Agent) or (d) any other bank or
other legally authorized Person, in each case, reasonably acceptable to Agent, in such Person’s capacity as an issuer of Letters of Credit
hereunder. For all purposes of this Agreement, any designation by an L/C Issuer made pursuant to clause (c) of this definition shall not
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affect such L/C Issuer’s rights and obligations with respect to its Commitment and the Credit Parties, the Lenders and Agent shall continue to
deal solely and directly with such L/C Issuer in connection with such L/C Issuer’s rights and obligations under this Agreement and the other
Loan Documents, except as otherwise expressly permitted in this Agreement.
“ L/C Reimbursement Obligation ” means, for any Letter of Credit, the obligation of the Applicable Borrower to the L/C Issuer thereof or
to Agent, as and when matured, to pay all amounts drawn under such Letter of Credit.
“ Lender ” means each Lender with a Revolving Loan Commitment (or if the Revolving Loan Commitments have terminated, who hold
Revolving Loans or participations in U.S. Swingline Loans or Letter of Credit Obligations). Furthermore, with respect to (a) each provision of
this Agreement relating to the making of any Canadian Revolving Loan or the extension of any Canadian Letter of Credit or the repayment or
the reimbursement thereof by the Canadian Borrower, (b) any rights of set-off with respect to any Canadian Credit Party, (c) any rights of
indemnification or expense reimbursement from any Canadian Credit Party and (d) reserves, capital adequacy or other provisions with respect
to any Lender to the Canadian Borrower (or such Lender’s holding company), each reference to a Lender shall be deemed to include such
Lender’s Applicable Designee. Notwithstanding the designation by any Lender of an Applicable Designee, Borrowers and Agent shall be
permitted to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement; provided ,
that each Applicable Designee shall be subject to the provisions obligating or restricting the Lenders under this Agreement.
“ Lending Office ” means, with respect to any Lender, the office or offices of such Lender specified as its “ Lending Office ” beneath its
name on the applicable signature page hereto, or such other office or offices of such Lender as it may from time to time notify the Borrower
Representative and Agent.
“ Letter of Credit ” means documentary or standby letters of credit Issued for the account of the Applicable Borrower by L/C Issuers, and
bankers’ acceptances issued by a Borrower, for which Agent and Lenders have incurred Letter of Credit Obligations.
“ Letter of Credit Obligations ” means all outstanding obligations incurred by Agent and Lenders at the request of the Borrowers or the
Borrower Representative, whether direct or indirect, contingent or otherwise, due or not due, in connection with the Issuance of Letters of
Credit by L/C Issuers or the purchase of a participation as set forth in Section 1.1(b) with respect to any Letter of Credit. The amount of such
Letter of Credit Obligations shall equal the maximum amount that may be payable by Agent and Lenders thereupon or pursuant thereto.
“ Liabilities ” means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties,
sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses (including, those incurred upon any appeal or in connection
with the preparation for and/or response to any subpoena or request for
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document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees,
charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.
“ LIBOR ” means, for each Interest Period for each LIBOR Rate Loan the offered rate per annum for deposits of Dollars for the
applicable Interest Period that appears on Reuters Screen LIBOR01 Page as of 11:00 A.M. (London, England time) two (2) Business Days
prior to the first day in such Interest Period. If no such offered rate exists, such rate will be the rate of interest per annum, as determined by
Agent at which deposits of Dollars in immediately available funds are offered at 11:00 A.M. (London, England time) two (2) Business Days
prior to the first day in such Interest Period by major financial institutions reasonably satisfactory to Agent in the London interbank market for
such Interest Period for the applicable principal amount on such date of determination.
“ LIBOR Rate Loan ” means a Loan that bears interest based on LIBOR.
“ Lien ” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement,
lien (statutory or otherwise), security interest or other security arrangement and any other preference, priority or preferential arrangement of
any kind or nature whatsoever, including those created by, arising under or evidenced by any conditional sale contract or other title retention
agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic
effect as any of the foregoing.
“ Loan ” means any loan made or deemed made by any Lender hereunder.
“ Loan Documents ” means this Agreement, the Notes, the Fee Letter, the Collateral Documents, the Intercreditor Agreement and all
documents delivered to Agent and/or any Lender in connection with any of the foregoing.
“ Margin Stock ” means “ margin stock ” as such term is defined in Regulation T, U or X of the Federal Reserve Board.
“ Material Adverse Effect ” means an effect that results in or causes, or could reasonably be expected to result in or cause, a material
adverse change in any of (a) the condition (financial or otherwise), business, performance, operations or Property of the Credit Parties and their
Subsidiaries taken as a whole; (b) the ability of any Credit Party, any Subsidiary of any Credit Party or any other Person (other than Agent or
Lenders) to perform its obligations under any Loan Document; or (c) the validity or enforceability of any Loan Document or the rights and
remedies of Agent, the Lenders and the other Secured Parties under any Loan Document.
“ Material Environmental Liabilities ” means Environmental Liabilities exceeding $3,000,000 in the aggregate.
“ Moody’s ” means Moody’s Investors Service, Inc.
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“ Mortgage ” means, with respect to each of the Mortgaged Properties, any deed of trust, leasehold deed of trust, mortgage, leasehold
mortgage, deed to secure debt, leasehold deed to secure debt or other document creating a Lien on such Mortgaged Property or any interest in
such Mortgaged Property.
“ Mortgaged Properties ” means all of the Real Estate described on Schedule B (and the term “ Mortgaged Property ” refers to each of the
Mortgaged Properties).
“ Multiemployer Plan ” means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA
Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.
“ National Flood Insurance Program ” means the program created by the U.S. Congress pursuant to the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973, as revised by the National Flood Insurance Reform Act of 1994, that mandates the
purchase of flood insurance to cover real property improvements located in Special Flood Hazard Areas in participating communities and
provides protection to property owners through a federal insurance program.
“ Net Issuance Proceeds ” means, in respect of any issuance of equity or incurrence of Indebtedness, cash proceeds (including cash
proceeds as and when received in respect of non-cash proceeds received or receivable in connection with such issuance), net of underwriting
discounts and reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of a
Borrower.
“ Net Orderly Liquidation Value ” means the cash proceeds of Inventory, which could be obtained in an orderly liquidation (net of all
liquidation expenses, costs of sale, operating expenses and retrieval and related costs), as determined pursuant to the most recent third-party
appraisal of such Inventory delivered to Agent by an appraiser reasonably acceptable to Agent.
“ Net Proceeds ” means proceeds in cash, checks or other cash equivalent financial instruments (including Cash Equivalents) as and when
received by the Person making a Disposition, as well as insurance proceeds and condemnation and similar awards received on account of an
Event of Loss, net of: (a) in the event of a Disposition (i) the direct costs relating to such Disposition excluding amounts payable to a Borrower
or any Affiliate of a Borrower, (ii) sale, use or other transaction Taxes paid or payable as a result thereof, and (iii) amounts required to be
applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Lien on the asset which is the subject
of such Disposition and (b) in the event of an Event of Loss, (i) so long as no Default or Event of Default has occurred and is continuing, all
money actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking, (ii) all of the costs
and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (iii) any amounts retained
by or paid to parties having superior rights to such proceeds, awards or other payments.
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“ NOLV Factor ” means, as of the date of the appraisal of Inventory most recently received by Agent, the quotient of the Net Orderly
Liquidation Value of Inventory divided by the book value of Inventory, expressed as a percentage. The NOLV Factor will be increased or
reduced promptly upon receipt by Agent of each updated appraisal.
“ Non-Funding Lender ” means any Lender that has (a) failed to fund any payments required to be made by it under the Loan Documents
within two (2) Business Days after any such payment is due (excluding expense and similar reimbursements that are subject to good faith
disputes), (b) given written notice (and Agent has not received a revocation in writing), to a Borrower, Agent, any Lender, or the L/C Issuer or
has otherwise publicly announced (and Agent has not received notice of a public retraction) that such Lender believes it will fail to fund
payments or purchases of participations required to be funded by it under the Loan Documents or one or more other syndicated credit facilities,
(c) failed to fund, and not cured, loans, participations, advances, or reimbursement obligations under one or more other syndicated credit
facilities, unless subject to a good faith dispute, or (d) (i) become subject to a voluntary or involuntary case under the Bankruptcy Code or any
similar bankruptcy laws, (ii) a custodian, conservator, receiver or similar official appointed for it or any substantial part of such Person’s assets,
or (iii) made a general assignment for the benefit of creditors, been liquidated, or otherwise been adjudicated as, or determined by any
Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or bankrupt, and for this clause (d) , Agent
has determined that such Lender is reasonably likely to fail to fund any payments required to be made by it under the Loan Documents.
“ Non-U.S. Lender Party ” means each of Agent, each Lender, each L/C Issuer, each SPV and each participant, in each case that is not a
United States person as defined in Section 7701(a)(30) of the Code.
“ Note ” means any Revolving Note or Swingline Note and “ Notes ” means all such Notes.
“ Notes Pari Passu Lien Obligations ” shall mean the Notes Pari Passu Lien Obligations as defined in the Indenture Documents in effect
on the date hereof.
“ Notes Priority Collateral ” means the Notes Priority Collateral (as defined in the Intercreditor Agreement).
“ Notice of Borrowing ” means a notice given by the Borrower Representative to Agent pursuant to Section 1.5 , in substantially the form
of Exhibit 11.1(c) hereto.
“ Obligations ” means (a) all Loans (including Overadvances), and other Indebtedness, advances, debts, liabilities, obligations, covenants
and duties owing by any Credit Party to any Lender, Agent, any L/C Issuer, any Secured Swap Provider or any other Person required to be
indemnified, that arises under any Loan Document or any Secured Rate Contract, whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired; provided that the
Obligations of any Guarantor shall not include any Excluded Rate Contract Obligations solely of such Guarantor and (b) all Bank Product
Obligations.
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“ Ordinary Course of Business ” means, in respect of any transaction involving any Person, the ordinary course of such Person’s business,
as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading
any covenant or restriction in any Loan Document.
“ Organization Documents ” means, (a) for any corporation, the certificate or articles of incorporation, amalgamation or continuation, as
applicable, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation and
any shareholder rights agreement, (b) for any company incorporated in England & Wales, its certificate of incorporation and any certificate of
incorporation on change of name and its articles and memorandum of association, (c) for any partnership, the partnership agreement and, if
applicable, certificate of limited partnership, (d) for any limited liability company, the operating agreement and articles or certificate of
formation or (e) any other document setting forth the manner of election or duties of the officers, directors, managers or other similar persons,
or the designation, amount or relative rights, limitations and preference of the Stock of a Person.
“ Other Connection Taxes ” means, with respect to any Secured Party, Taxes imposed as a result of a present or former connection
between such Secured Party and the jurisdiction imposing such Tax, other than any such connection arising solely from the Secured Party
having executed, delivered, become a party to, performed its obligations or received a payment under, received or perfected as a security
interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or
Loan Document.
“ Patents ” means all United States and foreign patents and certificates of invention, or similar industrial property rights, applications for
any of the foregoing, and related IP Ancillary Rights.
“ Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, P.L. 107-56, as amended.
“ PBGC ” means the United States Pension Benefit Guaranty Corporation or any successor thereto.
“ Permits ” means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant,
franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not
having the force of law and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is
subject.
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“ Permitted Acquisition ” means any Acquisition (other than the Closing Date Acquisition) by (i) a Credit Party (other than a Holding
Company) of substantially all of the assets of a Target, which assets are located in the United States or Canada or (ii) a Credit Party (other than
a Holding Company) or a Subsidiary of a Credit Party of 100% of the Stock and Stock Equivalents of a Target organized under the laws of any
State in the United States or the District of Columbia or any province or territory in Canada, in each case, to the extent that each of the
following conditions shall have been satisfied:
(a) the Borrower Representative shall have delivered to Agent at least fourteen (14) days prior to the consummation thereof (or such
shorter period as Agent may accept):
(i) (x) notice of such Acquisition setting forth in reasonable detail the terms and conditions of such Acquisition, (y) pro forma financial
statements of Holdings and its Subsidiaries after giving effect to the consummation of such Acquisition and the incurrence or assumption of
any Indebtedness in connection therewith and (z) to the extent available, a due diligence package, in each case, prior to closing of such
Acquisition;
(ii) a certificate of a Responsible Officer of the Borrower Representative demonstrating on a pro forma basis after giving effect to the
consummation of such Acquisition that the Fixed Charge Coverage Ratio shall be no less than the minimum Fixed Charge Coverage Ratio
required under Section 6.1 at such time calculated as of the last day of the most recent month preceding the date on which the Acquisition is
consummated for which financial statements have been delivered; and
(iii) to the extent available, such other information agreements, instruments and other documents as Agent reasonably shall request;
provided that, notwithstanding the foregoing, the Borrower Representative shall not be required to furnish to Agent the items specified in
clauses (a)(i)(y) , (a)(i)(z) and (a)(ii) above in connection with any Acquisition for which the total Acquisition Consideration paid or payable is
less than $10,000,000 so long as (x) actual Availability on the date upon which any such Acquisition is consummated, after giving effect to
such Acquisition, is not less than the greater of (1) $33,000,000 and (2) 30% of the Aggregate Commitment Amount at such time and (y) the
Borrower Representative shall have delivered to Agent at least fourteen (14) days prior to the consummation thereof (or such shorter period as
Agent may accept) a certificate of a Responsible Officer of the Borrower Representative demonstrating on a pro forma basis after giving effect
to the consummation of the Acquisition that the Fixed Charge Coverage Ratio shall be no less than the Fixed Charge Coverage Ratio calculated
as of the last day of the most recent month preceding the date on which the Acquisition is consummated for which financial statements have
been delivered in accordance with Section 4.1(b) ;
(b) the Borrower Representative shall have delivered to Agent (i) as soon as available, executed counterparts of the material agreements,
documents or instruments pursuant to which such Acquisition is to be consummated (including, any related management, non-compete,
employment, option or other material agreements), including any schedules to such agreements, documents or instruments, (ii) to the extent
required under the related acquisition agreement, all consents and approvals from applicable Governmental Authorities and other Persons and
(iii) if reasonably requested by Agent, environmental assessments satisfactory to Agent;
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(c) the Credit Parties (including any new Subsidiary to the extent required by Section 4.13 ) shall execute and deliver the agreements,
instruments and other documents required by Section 4.13 subject, with respect to perfection of Liens in the case of an Acquisition being
financed solely with proceeds of Net Issuance Proceeds of an Excluded Equity Issuance by Holdings, to customary “Funds Certain Provisions”;
(d) such Acquisition shall not be hostile and shall have been approved by the board of directors (or other similar body) and/or the
stockholders or other equityholders of the Target;
(e) without limiting the conditions set forth in Section 2.2 if such Acquisition is being financed with the proceeds of Loans, no Default or
Event of Default shall then exist or would exist after giving effect thereto or, with respect to an Acquisition being financed solely with Net
Issuance Proceeds of an Excluded Equity Issuance by Holdings, no Default or Event of Default exists as of, or would exist if such Acquisition
were consummated on, such Acquisition Agreement Signing Date;
(f) after giving effect to such Acquisition, Availability shall be not less than the greater of (i) $27,500,000 and (ii) 25% of the Aggregate
Revolving Loan Commitment;
(g) average Availability for the thirty (30) day period ending on the date of such Acquisition (giving pro forma effect to such Acquisition
for each day in such thirty (30) day period) shall be not less than the greater of (i) $27,500,000 and (ii) 25% of the Aggregate Revolving Loan
Commitment;
(h) the total consideration paid or payable (including all transaction costs, Indebtedness incurred, assumed and/or reflected on a
consolidated balance sheet of the Credit Parties and their Subsidiaries after giving effect to such Acquisition and the maximum amount of all
deferred payments, including earnouts) (such amounts, collectively, the “ Acquisition Consideration ”) for all Acquisitions consummated
during (x) any twelve (12) month period shall not exceed $25,000,000 in the aggregate for all such Acquisitions and (y) the term of this
Agreement shall not exceed $75,000,000 in the aggregate for all such Acquisitions;
(i) any earn-out obligations incurred in connection with a Permitted Acquisition shall be reflected as Indebtedness on the Credit Parties’
consolidated balance sheet to the extent required by GAAP; and
(j) the Target has EBITDA, subject to pro forma adjustments acceptable to Agent, for the most recent four quarters prior to the
acquisition date for which financial statements are available, greater than zero.
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Notwithstanding the foregoing, no Accounts or Inventory acquired by a Credit Party in a Permitted Acquisition shall be included as Eligible
Accounts or Eligible Inventory until a field examination (and, if required by Agent, an Inventory appraisal) with respect thereto has been
completed to the satisfaction of Agent, including the establishment of Reserves required in Agent’s Permitted Discretion; provided that field
examinations and appraisals in connection with Permitted Acquisitions shall not count against the limited number of field examinations or
appraisals for which expense reimbursement may be sought.
“ Permitted Discretion ” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment; provided , that in the case of the imposition of any Reserve, the amount of such Reserve will have a
reasonable relationship to the event, condition or other matter that is the basis for such Reserve in the reasonable judgment of the applicable
Person and shall be established in good faith without duplication for items already excluded from Eligible Accounts or Eligible Inventory, as
the case may be.
“ Permitted Payment Conditions ” means, collectively, (a) no Default or Event of Default has occurred and is continuing or would arise as
a result of the applicable payment, (b) after giving effect to such payment, the Fixed Charge Coverage Ratio for the twelve (12) month period
ending on the last day of the fiscal month for which financial statements have most recently been delivered in accordance with Section 4.1(b) ,
calculated on a pro forma basis, is at least 1.15 to 1.00, (c) after giving effect to such payment, Availability is not less than the greater of
$22,000,000 and 20% of the Aggregate Revolving Loan Commitment and (d) average Availability for the thirty (30) day period ending on the
date of such payment (giving pro forma effect to such payment for each day in such thirty (30) day period) is not less than the greater of
$22,000,000 and 20% of the Aggregate Revolving Loan Commitment.
“ Permitted Refinancing ” means Indebtedness constituting a refinancing or extension of Indebtedness permitted under Sections 5.5(c) ,
5.5(d) , 5.5(f) , 5.5(g) or 5.5(m) that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the
Indebtedness being refinanced or extended, (b) has a Weighted Average Life to Maturity (measured as of the date of such refinancing or
extension) and maturity no shorter than that of the Indebtedness being refinanced or extended, (c) is not entered into as part of a sale leaseback
transaction, (d) is not secured by a Lien on any assets other than the collateral securing the Indebtedness being refinanced or extended, (e) the
obligors of which are the same as the obligors of the Indebtedness being refinanced or extended and (f) is otherwise on terms no less favorable
to the Credit Parties and their Subsidiaries, taken as a whole, than those of the Indebtedness being refinanced or extended.
“ Permitted Supplier Financing Arrangement ” means a transaction or transactions whereby a Credit Party or Subsidiary thereof sells a
portion of its Accounts at the request of a customer of such Credit Party or Subsidiary (and, for the avoidance of doubt, not with respect to
Accounts of such Credit Party or Subsidiary generally) in the Ordinary Course of Business, which is approved by Agent in its Permitted
Discretion and, at a minimum, satisfies the following requirements:
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(a) such Credit Party, prior to entering into such transaction, shall have provided Agent with copies of all definitive agreements and
related documentation regarding such Permitted Supplier Financing Arrangements and such documentation is in form and substance reasonably
satisfactory to Agent;
(b) all or substantially all of the proceeds of such transaction are received by the applicable Credit Party in cash;
(c) the aggregate of the Accounts sold pursuant to all such transactions outstanding at any time shall not exceed the greater of
(i) $30,000,000 and (ii) 2.0% of the consolidated revenues of Holdings and its Subsidiaries for the most recently ended four full Fiscal Quarters
for which internal financial statements are then available;
(d) such transaction shall be without recourse to the Credit Parties (except for indemnity obligations that are customary in non-recourse
factoring arrangements);
(e) any discount rate applicable to such transaction shall be reasonable and customary based on market terms at such time; and
(f) prior to and after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
provided that, as of the Closing Date, the only customers of the Credit Parties subject to Permitted Supplier Financing Arrangements in effect
and approved by Agent shall be Tenedora Nemak, S.A. de C.V. and Nemak USA, Inc. (or an Affiliate thereof).
“ Person ” means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock
company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or
Governmental Authority.
“ PPSA ” means the Personal Property Security Act (Ontario) and the regulations thereunder, as from time to time in effect, provided,
however, if attachment, perfection or priority of Agent’s Liens in any Collateral are governed by the personal property security laws of any
Canadian jurisdiction other than Ontario, including the Civil Code of Quebec, PPSA shall mean those personal property security laws in such
other jurisdiction for the purposes of the provisions hereof relating to such attachment, perfection or priority and for the definitions related to
such provisions.
“ Prior Indebtedness ” means the Indebtedness and obligations specified in Schedule 11.1 hereto.
“ Prior Claims ” means all Liens created by applicable law (in contrast with Liens voluntarily granted) which rank or are capable of
ranking prior or pari passu with Agent’s security interests (or interests similar thereto under applicable law) against all or part of the Collateral,
including for amounts owing for employee source deductions, goods and services taxes, sales taxes, harmonized sales taxes, municipal taxes,
workers’ compensation, Quebec corporate taxes, pension fund obligations, Wage Earner Protection Program Act obligations and overdue rents.
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“ Prior Claims Reserve ” means, at any time of determination, a reserve established by Agent in an amount equal to the obligations and
liabilities of the Credit Parties and their Subsidiaries for Prior Claims at such time.
“ Prior Lender ” means each lender and agent party to any agreement governing Prior Indebtedness.
“ Property ” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.
“ Purchase Agreement ” means that certain Purchase and Sale Agreement dated October 17, 2014 by and among the Sponsor, Real Alloy
Acquisition, Evergreen Holding Germany GmbH, Aleris Corporation, Aleris International, Inc., Aleris Aluminum Netherlands B.V., Aleris
Deutschland Holding GmbH, Aleris Holding Canada Limited, Dutch Aluminum C.V. and Aleris Deutschland Vier GmbH Co KG, without any
amendment, modification or waiver of any of the provisions thereof that would be materially adverse to the Lenders without the consent of
Agent with it being understood and agreed that an increase in the purchase price to be paid in connection with the Closing Date Acquisition
shall not be deemed to be materially adverse to the Lenders if it is not funded by any incurrence of Indebtedness, but is instead funded by cash
on the balance sheet of the Sponsor and its Subsidiaries, the Borrowers and/or the net cash proceeds of the Closing Date Equity Issuance and a
decrease in the purchase price of less than ten (10%) shall not be deemed to be materially adverse to the Lenders.
“ Purchase Agreement Representations ” means the representations and warranties regarding each of Acquired Businesses contained in
the Purchase Agreement as are material to the interests of Agent and the Lenders, but, only to the extent that Real Alloy Acquisition, any other
Credit Party or any Affiliate of Real Alloy Acquisition has the right to terminate its obligations under the Purchase Agreement (or the right not
consummate the Closing Date Acquisition pursuant to the Purchase Agreement) as a result of the failure of such representations and warranties
to be true and correct.
“ Qualified ECP Guarantor ” means, in respect of any Swap Obligation under a Secured Rate Contract, each Credit Party that has total
assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such
Swap Obligation under a Secured Rate Contract or such other person as constitutes an “ eligible contract participant ” under the Commodity
Exchange Act and can cause another person to qualify as an “ eligible contract participant ” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“ Rate Contracts ” means swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or
arrangements designed to provide protection against fluctuations in interest or currency exchange rates.
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“ Real Alloy Germany ” means Aleris Recycling (German Works) GmbH, a limited liability company organized under the laws of
Germany, to be known as Real Alloy Germany GmbH, a limited liability company organized under the laws of Germany, on or about the
Closing Date.
“ Real Estate ” means any Real Estate owned, leased, subleased or otherwise operated or occupied by any Credit Party or any Subsidiary
of any Credit Party.
“ Related Agreements ” means the Loan Documents, the Indenture Documents, the Factoring Facility Documents, the Closing Date
Equity Transaction Documents and the Purchase Agreement.
“ Related Persons ” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee,
representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor (including those retained in
connection with the satisfaction or attempted satisfaction of any condition set forth in Article II ) and other consultants and agents of or to such
Person or any of its Affiliates.
“ Related Transactions ” means the transactions contemplated by the Related Agreements including the consummation of the Closing
Date Acquisition, the release of the Escrowed Funds (as defined in the Indenture) by Wilmington Trust, National Association, as escrow agent,
in accordance with the Indenture Documents, the consummation of the Closing Date Equity Transaction, the making of the initial Revolving
Loans, the Issuance of the initial Letters of Credit and the initial purchase of receivables under the Factoring Facility Documents, all on the
Closing Date, and the payment of the fees and expenses incurred in connection with any of the foregoing.
“ Releases ” means any release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.
“ Remedial Action ” means all actions required to (a) clean up, remove, treat or in any other way address any Hazardous Material in the
indoor or outdoor environment, (b) prevent or minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment or (c) perform pre remedial studies and investigations and
post-remedial monitoring and care with respect to any Hazardous Material.
“ Required Lenders ” means at any time (a) Lenders then holding more than fifty percent (50%) of the sum of the Aggregate Revolving
Loan Commitment then in effect, or (b) if the Aggregate Revolving Loan Commitments have terminated, Lenders then holding more than fifty
percent (50%) of the sum (without duplication) of the aggregate unpaid principal amount of Loans (other than U.S. Swingline Loans) then
outstanding, amounts of participations in outstanding Letter of Credit Obligations and U.S. Swingline Loans and the principal amount of
unparticipated portions of Letter of Credit Obligations and U.S. Swingline Loans; provided , however , that at any time that there are two or
more Lenders, Required Lenders shall include at least two Lenders.
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“ Requirement of Law ” means, with respect to any Person or any Property, the common law and any federal, state, provincial, territorial,
local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders,
judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration
thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having
the force of law and that are applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is
subject. For the avoidance of doubt, the term “ Requirement of Law ” shall include FATCA and any intergovernmental agreements with respect
thereto between the United States and another jurisdiction.
“ Reserves ” means, with respect to each of the U.S. Borrowing Base and Canadian Borrowing Base, (a) reserves established by Agent
from time to time against Eligible Accounts pursuant to Section 1.13 and Eligible Inventory pursuant to Section 1.14 , and (b) such other
reserves (including the Capped Indebtedness Reserve, Prior Claims Reserve, the Secured Rate Contracts Reserve and the Bank Product
Reserve) against Eligible Accounts, Eligible Inventory or Availability that Agent may, in its Permitted Discretion, establish from time to time.
Without limiting the generality of the foregoing, Reserves established to ensure the payment of interest expenses or Indebtedness shall be
deemed to be an exercise of Agent’s Permitted Discretion.
“ Responsible Officer ” means the chief executive officer or the president of a Borrower or the Borrower Representative, as applicable, or
any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants or delivery
of financial information, the chief financial officer, treasurer, controller or assistant treasurer of a Borrower or the Borrower Representative, as
applicable, or any other officer having substantially the same authority and responsibility.
“ Revolving Loan Commitment ” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and
acquire interests in Letter of Credit Obligations and U.S. Swingline Loans, which initial commitments are set forth opposite such Lender’s
name in Schedule 1.1(a) under the heading “Revolving Loan Commitments”, as such commitment may be (a) reduced from time to time
pursuant to this Agreement and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to an
Assignment.
“ Revolving Note ” means a promissory note of the Borrowers payable to a Lender in substantially the form of Exhibit 11.1(d) hereto,
evidencing Indebtedness of the Borrowers under the Revolving Loan Commitment of such Lender.
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“ Revolving Termination Date ” means the earlier to occur of: (a) February 27, 2019; and (b) the date on which the Aggregate Revolving
Loan Commitment shall terminate in accordance with the provisions of this Agreement. Notwithstanding the foregoing, in the event that the
Scheduled Notes Pari Passu Lien Obligations Maturity Date is not extended (whether through a Permitted Refinancing or an amendment not in
violation of the Intercreditor Agreement) at least 120 days prior to the Scheduled Notes Pari Passu Lien Obligations Maturity Date in effect as
of the Closing Date, the Revolving Termination Date shall be ninety (90) days prior to the Scheduled Notes Pari Passu Lien Obligations
Maturity Date in effect as of the Closing Date.
“ S&P ” means Standard & Poor’s Rating Services.
“ Scheduled Notes Pari Passu Lien Obligations Maturity Date ” means January 15, 2019, or, to the extent the Notes Pari Passu Lien
Obligations are refinanced, the maturity date applicable to any such Permitted Refinancing of the Notes Pari Passu Lien Obligations.
“ Secured Party ” means Agent, each Lender, each L/C Issuer, each other Indemnitee and each other holder of any Obligation of a Credit
Party including each Secured Swap Provider and Bank Product Provider.
“ Secured Rate Contract ” means any Rate Contract between a Borrower and the counterparty thereto, which (a) has been provided or
arranged by GE Capital or an Affiliate of GE Capital or (b) Agent has acknowledged in writing constitutes a “ Secured Rate Contract ”
hereunder.
“ Secured Rate Contracts Reserve ” means, at any time of determination, a reserve established by Agent in an amount equal to the
obligations and liabilities of the Credit Parties and their Subsidiaries under Secured Rate Contracts at such time.
“ Secured Swap Provider ” means (a) a Lender or an Affiliate of a Lender (or a Person who was a Lender or an Affiliate of a Lender at
the time of execution and delivery of a Rate Contract) who has entered into a Secured Rate Contract with a Borrower, or (b) a Person with
whom Borrower has entered into a Secured Rate Contract provided or arranged by GE Capital or an Affiliate of GE Capital, and any assignee
thereof.
“ Seller ” means, collectively, Aleris Corporation, Aleris International, Inc., Aleris Aluminum Netherlands B.V., Aleris Deutschland
Holding GmbH, Aleris Holding Canada Limited, Dutch Aluminum C.V. and Aleris Deutschland Vier GmbH Co KG.
“ SGH Escrow Corporation ” means SGH Escrow Corporation, a Delaware corporation.
“ Software ” means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of
data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.
156
“ Solvent ” means, with respect to any Person as of any date of determination, that, as of such date, (a) the value of the assets of such
Person (both at fair value and present fair saleable value) is greater than the total amount of liabilities (including contingent and unliquidated
liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not
have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be
computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
“ Special Flood Hazard Area ” means an area that FEMA’s current flood maps indicate has at least a one percent (1%) chance of a flood
equal to or exceeding the base flood elevation (a 100-year flood) in any given year.
“ Sponsor ” means Signature Group Holdings, Inc., a Delaware corporation.
“ SPV ” means any special purpose funding vehicle identified as such in a writing by any Lender to Agent.
“ Stock ” means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial,
partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of
how designated) of or in a Person (other than an individual), whether voting or non-voting.
“ Stock Equivalents ” means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants,
options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently
convertible, exchangeable or exercisable.
“ Subsidiary ” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or
other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than fifty percent (50%) of the
voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more Subsidiaries of such Person; provided
that, with respect to any Person incorporated in the United Kingdom, “ Subsidiary ” shall include a subsidiary within the meaning of
Section 1162 of the U.K. Companies Act 2006.
“ Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction
that constitutes a “ swap ” within the meaning of section 1a(47) of the Commodity Exchange Act.
“ Swingline Lender ” means, each in its capacity as Swingline Lender hereunder, GE Capital or, upon the resignation of GE Capital as
Agent hereunder, any Lender (or Affiliate or Approved Fund of any Lender) that agrees, with the approval of Agent (or, if there is no such
successor Agent, the Required Lenders) and the U.S. Borrowers, to act as the Swingline Lender hereunder.
“ Swingline Note ” means a promissory note of the U.S. Borrowers payable to the Swingline Lender, in substantially the form of Exhibit
11.1(e) hereto, evidencing the Indebtedness of the U.S. Borrowers to the Swingline Lender resulting from the Swingline Loans made to the
U.S. Borrowers by the Swingline Lender.
157
“ Target ” means any Person or business unit or asset group of any Person acquired or proposed to be acquired in an Acquisition.
“ Tax Affiliate ” means, (a) each Borrower and its Subsidiaries. (b) each other Credit Party and (c) any Affiliate of a Borrower with
which such Borrower files or is eligible to file consolidated, combined or unitary Tax returns.
“ Title IV Plan ” means a pension plan subject to Title IV of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate
incurs or otherwise has any obligation or liability, contingent or otherwise.
“ Total Assets ” means the total consolidated assets of the Credit Parties and their Subsidiaries, as shown on the most recent balance sheet
pursuant to Section 4.1 .
“ Trade Secrets ” means all trade secrets and all other confidential or proprietary information and know-how whether or not the foregoing
has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to
the foregoing, including all related IP Ancillary Rights.
“ Trademark ” means all United States and foreign trademarks, trade names, trade dress, corporate names, company names, business
names, fictitious business names, service marks, certification marks, collective marks, logos, other source or business identifiers, designs and
general intangibles of a like nature, whether or not registered, and with respect to any and all of the foregoing, all registrations and applications
therefor and all related IP Ancillary Rights.
“ Trigger Event ” means any time that Availability is less than 12.5% of the Aggregate Revolving Loan Commitment at such time (each
such date, a “ Trigger Date ”). Upon the occurrence of a Trigger Event, such Trigger Event shall be deemed to be continuing until the date that
is the first date on which at all times during the preceding 60 consecutive days, Availability is greater than 12.5% of the Aggregate Revolving
Loan Commitment at such time (each such period, a “ Trigger Period ”).
“ UCC ” means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any
Uniform Commercial Code, the Uniform Commercial Code as in effect from time to time in the State of New York.
“ United Kingdom ” and “ U.K. ” each means the United Kingdom of Great Britain and Northern Ireland.
“ United States ” and “ U.S. ” each means the United States of America.
“ U.S. Borrowing Base ” means, with respect to the U.S. Borrowers on a consolidated basis, as of any date of determination by Agent,
from time to time, an amount equal to the lesser of:
158
(a) the Aggregate Revolving Loan Commitment at such time less the Canadian Outstandings at such time; and
(b) the sum of (x) 85% of the book value of Eligible Accounts of such Borrowers at such time, plus (y) the lesser of (i) 75% of the
book value of Eligible Inventory of such Borrowers valued at the lower of cost or market on a first-in, first-out basis, and (ii) 85% of the book
value of Eligible Inventory of such Borrowers, valued at the lower of cost or market on a first-in, first-out basis multiplied by the NOLV
Factor; and
in each case less Reserves established by Agent at such time in its Permitted Discretion.
“ U.S. Collateral ” means “Collateral” as defined in the U.S. Revolving Guaranty and Security Agreement and shall include all rights,
titles and interests of the U.S. Credit Parties in, to or under the Mortgaged Properties.
“ U.S. Credit Parties ” means each Holding Company, each U.S. Borrower and each U.S. Subsidiary (a) which executes a guaranty of the
Obligations, (b) which grants a Lien on its U.S. Collateral to secure payment of the Obligations and (c) all of the Stock of which is pledged to
Agent for the benefit of the Secured Parties.
“ U.S. Dollar Equivalent ” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect
to any amount denominated in Canadian Dollars, the equivalent in Dollars of such amount determined by using the rate of exchange at which
Agent, on the relevant date at or about 12:00 noon (Toronto time), would be prepared to sell, in accordance with Agent’s customary practice for
commercial loans being administered by it.
“ U.S. Lender Party ” means each of Agent, each Lender, each L/C Issuer, each SPV and each participant, in each case that is a United
States person as defined in Section 7701(a)(30) of the Code.
“ U.S. Obligations ” means all Obligations other than the Canadian Obligations.
“ U.S. Outstandings ” means, as of any time of determination thereof, the sum (without duplication) of the aggregate outstanding
principal balance at such time of the U.S. Revolving Loans, the aggregate outstanding principal balance at such time of the U.S. Swingline
Loans, and the aggregate amount of Letter of Credit Obligations for all U.S. Letters of Credit outstanding at such time.
“ U.S. Revolving Guaranty and Security Agreement ” means that certain U.S. Revolving Guaranty and Security Agreement, dated as of
the Closing Date, made by the U.S. Credit Parties in favor of Agent, for the benefit of the Secured Parties, as the same may be amended,
restated and/or modified from time to time.
“ U.S. Subsidiary ” means each Wholly-Owned Subsidiary of Holdings that is organized under the laws of any state of the United States
or the District of Columbia.
159
“ U.S. Swingline Limit ” means $11,000,000.
“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment or other required payments of principal,
including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment by (b) the then outstanding principal amount of such Indebtedness; provided that for
purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being modified, refinanced, refunded, renewed,
replaced or extended, the effects of any prepayments made on such Indebtedness prior to the date of the applicable extension shall be
disregarded.
“ Wholly-Owned Subsidiary ” of a Person means any Subsidiary of such Person, all of the Stock and Stock Equivalents of which (other
than directors’ qualifying shares required by law) are owned by such Person, either directly or through one or more Wholly-Owned
Subsidiaries of such Person.
11.2 Other Interpretive Provisions .
(a) Defined Terms . Unless otherwise specified herein or therein, all terms defined in this Agreement or in any other Loan
Document shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto. The meanings of
defined terms shall be equally applicable to the singular and plural forms of the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein and that are defined in the UCC shall have the meanings therein described.
(b) The Agreement . The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement or any
other Loan Document shall refer to this Agreement or such other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document; and subsection, section, schedule and exhibit references are to this Agreement or such other Loan
Documents unless otherwise specified.
(c) Certain Common Terms . The term “documents” includes any and all instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced. The term “including” is not limiting and means “including without limitation.”
(d) Performance; Time . Whenever any performance obligation hereunder or under any other Loan Document (other than a payment
obligation) shall be stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied
on the next succeeding Business Day. For the avoidance of doubt, the initial payments of interest and fees relating to the Obligations (other
than amounts due on the Closing Date) shall be due and paid on the first day of the first calendar month or quarter, as applicable, following the
entry of the Obligations onto the operations systems of Agent, but in no event later than the first day of the second
160
calendar month or quarter, as applicable, following the Closing Date. In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through”
means “to and including.” All references to the time of day shall be a reference to New York time. If any provision of this Agreement or any
other Loan Document refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision
shall be interpreted to encompass any and all means, direct or indirect, of taking, or not taking, such action.
(e) Contracts . Unless otherwise expressly provided herein or in any other Loan Document, references to agreements and other
contractual instruments, including this Agreement and the other Loan Documents, shall be deemed to include all subsequent amendments,
thereto, restatements and substitutions thereof and other modifications and supplements thereto which are in effect from time to time, but only
to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document.
(f) Laws . References to any statute or regulation may be made by using either the common or public name thereof or a specific cite
reference and, except as otherwise provided with respect to FATCA, are to be construed as including all statutory and regulatory provisions
related thereto or consolidating, amending, replacing, supplementing or interpreting the statute or regulation.
11.3 Accounting Terms and Principles . All accounting determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in accordance with GAAP. No change in the accounting principles used in the preparation of any financial
statement hereafter adopted by a Holding Company shall be given effect for purposes of measuring compliance with any provision of Article V
or VI unless the Borrowers, Agent and the Required Lenders agree to modify such provisions to reflect such changes in GAAP and, unless such
provisions are modified, all financial statements, Compliance Certificates and similar documents provided hereunder shall be provided together
with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP.
Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to in Article V and Article VI shall be made, without giving effect to any election under
Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other Liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value.” A breach of a financial covenant
contained in Article VI shall be deemed to have occurred as of any date of determination by Agent or as of the last day of any specified
measurement period, regardless of when the financial statements reflecting such breach are delivered to Agent. For purposes of determining pro
forma compliance with any financial covenant as of any date prior to the first date on which such financial covenant is to be tested hereunder,
the level of any such financial covenant shall be deemed to be the covenant level for such first test date.
161
11.4 Payments . Agent may set up standards and procedures to determine or redetermine the equivalent in Dollars of any amount
expressed in any currency other than Dollars and otherwise may, but shall not be obligated to, rely on any determination made by any Credit
Party or any L/C Issuer. Any such determination or redetermination by Agent shall be conclusive and binding for all purposes, absent manifest
error. No determination or redetermination by any Secured Party or any Credit Party and no other currency conversion shall change or release
any obligation of any Credit Party or of any Secured Party (other than Agent and its Related Persons) under any Loan Document, each of which
agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted. Agent may round up or
down, and may set up appropriate mechanisms to round up or down, any amount hereunder to nearest higher or lower amounts and may
determine reasonable de minimis payment thresholds.
[Signature Pages Follow.]
162
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the day and year first above written.
U.S. BORROWERS:
ALERIS RECYCLING, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539798
Effective upon the change of name from “Aleris
Recycling, Inc.” to “Real Alloy Recycling, Inc.”:
REAL ALLOY RECYCLING, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539798
ALERIS RECYCLING BENS RUN, LLC
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539798
Effective upon the change of name from “Aleris
Recycling Bens Run, LLC” to “Real Alloy Bens
Run, LLC”:
REAL ALLOY BENS RUN, LLC
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539798
[Signature Page to Revolving Credit Agreement]
ALERIS SPECIALTY PRODUCTS, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539911
Effective upon the change of name from “Aleris
Specialty Products, Inc.” to “Real Alloy
Specialty Products, Inc.”:
REAL ALLOY SPECIALTY PRODUCTS, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539911
ALERIS SPECIFICATION ALLOYS, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539849
Effective upon the change of name from “Aleris
Specification Alloys, Inc.” to “Real Alloy
Specification, Inc.”:
REAL ALLOY SPECIFICATION, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539849
ETS SCHAEFER, LLC
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539798
[Signature Page to Revolving Credit Agreement]
CANADIAN BORROWER:
ALERIS SPECIFICATION ALLOY
PRODUCTS CANADA COMPANY
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: President
Effective upon the change of name from “Aleris
Specification Alloy Products Canada Company”
to “Real Alloy Canada Ltd.”:
REAL ALLOY CANADA LTD.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
BORROWER REPRESENTATIVE:
ALERIS RECYCLING, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539798
Effective upon the change of name from “Aleris
Recycling, Inc.” to “Real Alloy Recycling, Inc.”:
REAL ALLOY RECYCLING, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 27-1539798
[Signature Page to Revolving Credit Agreement]
Address for notices:
Real Alloy Acquisition, Inc.
c/o Signature Group Holdings, Inc.
15301 Ventura Blvd, Ste 400
Sherman Oaks, CA 91403
Attention: Kyle Ross, EVP and CFO
with copy to:
Real Alloy Acquisition, Inc.
25825 Science Park Drive, Ste 400
Beachwood, OH 44122
Attention: Michael Hobey, CFO
Address for wire transfers:
ABA No. 071925444
Account Number 3805704386
Wintrust Bank
Account Name: Aleris Recycling, Inc.
(Concentration Account)
[Signature Page to Revolving Credit Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the day and year first above written.
REAL ALLOY INTERMEDIATE HOLDING, LLC
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Manager
FEIN: 36-4797447
REAL ALLOY HOLDING, INC.
By:
/s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
FEIN: 30-0842396
REAL ALLOY CANADA COMPANY
By: /s/ Kyle Ross
Name: Kyle Ross
Title: Assistant Secretary
RA MEXICO HOLDING, LLC
By: /s/ W. Christopher Manderson
Name: W. Christopher Manderson
Title: Secretary
FEIN: 32-0454620
Address for notices:
Real Alloy Acquisition, Inc.
c/o Signature Group Holdings, Inc.
15301 Ventura Blvd, Ste 400
Sherman Oaks, CA 91403
Attention: Kyle Ross, EVP and CFO
with copy to:
Real Alloy Acquisition, Inc.
25825 Science Park Drive, Ste 400
Beachwood, OH 44122
Attention: Michael Hobey, CFO
[Signature Page to Revolving Credit Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the day and year first above written.
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent, Swingline Lender and as a
Lender
By: /s/ Michael R. Todorow
Name: Michael R. Todorow
Title: Its Duly Authorized Signatory
Address for Notices:
General Electric Capital Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attn: Real Alloy Account Officer
Facsimile: (312) 463-3840
With a copy (which copy shall not constitute notice) to:
General Electric Capital Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attn: Mark O’Leary, General Counsel, and Kim Reich, Senior Counsel
Facsimile: (312) 441-6876
and
General Electric Capital Corporation
500 West Monroe Street
Chicago, Illinois 60661
Attn: Senior Counsel – Corporate Finance
Facsimile: (312) 441-6876
Agent’s deposit account for payments:
ABA No. 021-001-033
Account Number 50279513
Deutsche Bank Trust Company Americas
New York, New York
Account Name: GECC CFS CIF Collection Account
Reference: Aleris Recycling, Inc. - CFL1350
[Signature Page to Revolving Credit Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the day and year first above written
WINTRUST BANK ,
as a Lender
By: /s/ George A. Reimnitz
Name:
George A. Reimnitz
Title:
Senior Vice President, Wintrust
Commercial Banking
Address for notices:
Wintrust Bank
9700 W. Higgins Road
Rosemont, IL 60018
Attn:
Facsimile:
Lending office:
[Signature Page to Revolving Credit Agreement]
Schedule A
U.S. Borrowers
1.
Aleris Recycling, Inc., a Delaware corporation, to be known as Real Alloy Recycling, Inc., a Delaware corporation
2.
Aleris Recycling Bens Run, LLC, a Delaware limited liability company, to be known as Real Alloy Bens Run, LLC, a Delaware limited
liability company
3.
Aleris Specialty Products, Inc., a Delaware corporation, to be known as Real Alloy Specialty Products, Inc., a Delaware corporation
4.
Aleris Specification Alloys, Inc., a Delaware corporation, to be known as Real Alloy Specification, Inc., a Delaware corporation
5.
ETS Schaefer, LLC, an Ohio limited liability company
Schedule B
Mortgaged Properties
OWNER
LOCATION
Aleris Recycling, Inc.
16168 West Prairie Ave.
Post Falls, ID 83854
Aleris Recycling, Inc.
109 Dimension Ave.
Wabash, IN 46992
Aleris Recycling, Inc.
305 Dimension Ave.
Wabash, IN 46992
Aleris Recycling, Inc.
267 North Fillmore Road
Coldwater, MI 49036
Aleris Recycling, Inc.
388 Williamson Drive
PO Box 187
Loudon, TN 37774
Aleris Recycling, Inc.
283 Industrial Park
Friendly, WV 26146
Old Address:
3816 South State Route 2
Friendly, WV 26146
ETS Schaefer, LLC
8050 Highland Pointe Parkway
Macedonia, OH 44056
Aleris Specification Alloys, Inc.
368 West Garfield Avenue
Coldwater, MI 49036
Aleris Specification Alloys, Inc.
430 West Garfield Avenue
Coldwater, MI 49036
Aleris Specification Alloys, Inc.
425 Jay Street
Coldwater, MI 49036
OWNER
LOCATION
Aleris Specification Alloys, Inc.
514 Butters Avenue
Coldwater, MI 49036
Aleris Specification Alloys, Inc.
2600 Nodular Drive
Saginaw, MI 48601
Aleris Specialty Products, Inc.
320 Huron Street
Elyria, OH
Aleris Specialty Products, Inc.
2639 East Water St.
Rock Creek, OH 44084
Aleris Recycling Bens Run, LLC
12107 Energy Highway
Friendly, WV 26146
Old Address :
4203 South State Route 2
Friendly, WV 26146
Aleris Recycling Bens Run, LLC
25 acres of Vacant Land near
Bens Run facility
Address unknown
Aleris Specification Alloy Products Canada Company
7496 Torbram Road
Mississauga, Ontario
Canada L4T 1G9
Schedule 1.1(a)
Revolving Loan Commitments
General Electric Capital Corporation
Wintrust Bank
$
$
95,000,000
15,000,000
Exhibit 10.3
Execution Version
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
Dated as of February 27, 2015
by
ALERIS RECYCLING, INC. TO BE KNOWN AS
REAL ALLOY RECYCLING, INC.,
as a U.S. Borrower,
and
EACH OTHER U.S. BORROWER AND GRANTOR
FROM TIME TO TIME PARTY HERETO
in favor of
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS
Section 1.1
Definitions
Section 1.2
Certain Other Terms
2
2
6
ARTICLE II GUARANTY
Section 2.1
Guaranty
Section 2.2
Limitation of Guaranty
Section 2.3
Contribution
Section 2.4
Authorization; Other Agreements
Section 2.5
Guaranty Absolute and Unconditional
Section 2.6
Waivers
Section 2.7
Reliance
8
8
8
8
9
9
10
11
ARTICLE III GRANT OF SECURITY INTEREST
Section 3.1
Collateral
Section 3.2
Grant of Security Interest in Collateral
Section 3.3
Intercreditor Agreement
11
11
12
12
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.1
Title; No Other Liens
Section 4.2
Perfection and Priority
Section 4.3
Pledged Collateral
Section 4.4
Instruments and Tangible Chattel Paper Formerly Accounts
Section 4.5
Intellectual Property
Section 4.6
Commercial Tort Claims
Section 4.7
Specific Collateral
Section 4.8
Enforcement
Section 4.9
Representations and Warranties of the Credit Agreement
13
13
14
14
15
15
15
15
16
16
ARTICLE V COVENANTS
Section 5.1
Maintenance of Perfected Security Interest; Further Documentation and Consents
Section 5.2
Pledged Collateral
Section 5.3
Accounts
Section 5.4
Commodity Contracts
Section 5.5
Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit
Rights and Electronic Chattel Paper
Section 5.6
Intellectual Property
Section 5.7
Notices
Section 5.8
Notice of Commercial Tort Claims
Section 5.9
Controlled Securities Account
16
16
17
18
19
ARTICLE VI REMEDIAL PROVISIONS
Section 6.1
Code and Other Remedies
21
21
i
19
19
20
21
21
TABLE OF CONTENTS
(continued)
Page
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Accounts and Payments in Respect of General Intangibles
Pledged Collateral
Proceeds to be Turned over to and Held by Agent
Sale of Pledged Collateral
Deficiency
24
25
26
27
27
ARTICLE VII AGENT
Section 7.1
Agent’s Appointment as Attorney-in-Fact
Section 7.2
Authorization to File Financing Statements
Section 7.3
Authority of Agent
Section 7.4
Duty; Obligations and Liabilities
27
27
29
30
30
ARTICLE VIII MISCELLANEOUS
Section 8.1
Reinstatement
Section 8.2
Release of Collateral
Section 8.3
Independent Obligations
Section 8.4
No Waiver by Course of Conduct
Section 8.5
Amendments in Writing
Section 8.6
Additional Grantors; Additional Pledged Collateral
Section 8.7
Notices
Section 8.8
Successors and Assigns
Section 8.9
Counterparts
Section 8.10
Severability
Section 8.11
Governing Law
Section 8.12
Waiver of Jury Trial
Section 8.13
ULC Limitation
31
31
31
32
32
32
32
33
33
33
33
33
33
33
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ANNEXES AND SCHEDULES
Annex 1
Annex 2
Annex 3
Form of Pledge Amendment
Form of Joinder Agreement
Form of Intellectual Property Security Agreement
Schedule 1
Schedule 2
Schedule 3
Commercial Tort Claims
Filings
Pledged Collateral
iii
This U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT (including all exhibits, annexes and schedules hereto, as the
same may be amended, modified and/or restated from time to time, this “ Agreement ”), dated as of February 27, 2015, by Aleris Recycling,
Inc., a Delaware corporation, to be known as Real Alloy Recycling, Inc., a Delaware corporation, on the Closing Date, Aleris Recycling Bens
Run, LLC, a Delaware limited liability company, to be known as Real Alloy Bens Run, LLC, a Delaware limited liability company, on the
Closing Date, Aleris Specialty Products, Inc., a Delaware corporation, to be known as Real Alloy Specialty Products, Inc., a Delaware
corporation, on the Closing Date, Aleris Specification Alloys, Inc., a Delaware corporation, to be known as Real Alloy Specification, Inc., a
Delaware corporation, on the Closing Date, and ETS Schaefer, LLC, an Ohio limited liability company (collectively, the “ U.S. Borrowers ”)
and each of the other entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 8.6 (together with the U.S.
Borrowers, the “ Grantors ” and each, a “ Grantor ”), in favor of General Electric Capital Corporation (“ GE Capital ”), in its capacity as
administrative agent (in such capacity, together with its successors and permitted assigns, “Agent”) for the Lenders, the L/C Issuers and each
other Secured Party (each as defined in the Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, pursuant to the Revolving Credit Agreement dated as of the date hereof (as the same may be amended, refinanced, replaced,
restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”) by and among the U.S. Borrowers, Aleris
Specification Alloy Products Canada Company (the “ Canadian Borrower ”; together with the U.S. Borrowers, the “ Borrowers ”), the other
Credit Parties from time to time party thereto, the Lenders, the L/C Issuers from time to time party thereto and GE Capital, as Agent, the
Lenders and the L/C Issuers have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions
set forth therein;
WHEREAS, each Grantor has agreed to guaranty the Obligations (as defined in the Credit Agreement, and including the Canadian
Obligations);
WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders and the L/C Issuers to make their respective extensions of credit
to the Borrowers under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to Agent.
NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the L/C Issuers and Agent to enter into the Credit
Agreement and to induce the Lenders and the L/C Issuers to make their respective extensions of credit to the Borrowers thereunder, each
Grantor hereby agrees with Agent as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions . (a) Capitalized terms used herein without definition are used as defined in the Credit Agreement.
(b) The following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in
the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the
terms defined): “ account debtor ”, “ as-extracted collateral ”, “ certificated security ”, “ chattel paper ”, “ commercial tort claim ”, “
commodity contract ”, “ deposit account ”, “ electronic chattel paper ”, “ equipment ”, “ farm products ”, “ fixture ”, “ general intangible ”, “
goods ”, “ health-care-insurance receivable ”, “ instruments ”, “ investment property ”, “ letter-of-credit right ”, “ money ”, “ proceeds ”, “
record ”, “ securities account ”, “ security ”, “ supporting obligation ” and “ tangible chattel paper ”.
(c) The following terms shall have the following meanings:
“ Acquisition Agreement ” shall mean the Purchase and Sale Agreement, dated as of October 17, 2014, by and among Aleris
Corporation, a Delaware corporation, Aleris International, Inc., a Delaware corporation, Aleris Holding Canada Limited, a New Brunswick
corporation, Aleris Aluminum Netherlands B.V., a limited liability company organized under the laws of the Netherlands, Aleris Deutschland
Holding GmbH, a limited liability company organized under the laws of Germany, Dutch Aluminum C.V., a limited partnership organized
under the laws of the Netherlands, and Aleris Deutschland Vier GmbH Co KG, a limited partnership organized under the laws of Germany,
SGH Acquisition Holdco, Inc., a Delaware corporation, Evergreen Holding Germany GmbH, a limited liability company organized under the
laws of Germany and Signature Group Holdings, Inc., a Delaware corporation.
“ Agent ” has the meaning given such term in the preamble to this Agreement.
“ Agreement ” has the meaning given such term in the preamble to this Agreement.
“ Applicable IP Office ” means the United States Patent and Trademark Office, the United States Copyright Office or any similar
office or agency within or outside the United States.
“ Borrowers ” has the meaning given such term in the preamble to this Agreement.
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“ Cash Collateral Account ” means a deposit account or securities account subject, in each instance, to a Control Agreement, other
than accounts established to cash collateralize L/C Reimbursement Obligations.
“ Collateral ” has the meaning specified in Section 3.1 .
“ Controlled Securities Account ” means each securities account (including all financial assets held therein and all certificates and
instruments, if any, representing or evidencing such financial assets) that is the subject of an effective Control Agreement.
“ Discharge of Notes Obligations ” has the meaning given such term in the Intercreditor Agreement.
“ Excluded Equity ” means (a) with respect to any Excluded Foreign Subsidiary directly owned by a Grantor, all Voting Stock in
excess of 65% of the outstanding Voting Stock of such Foreign Subsidiary, (b) with respect to all other Excluded Foreign Subsidiaries, all
Voting Stock of such Foreign Subsidiaries and (c) with respect to Excluded Domestic Subsidiaries, all capital stock of such Domestic
Subsidiaries; provided , however , that Voting Stock of the Canadian Borrower or any other Foreign Subsidiary directly owned by a Grantor
shall not constitute, or be deemed or construed to constitute, “Excluded Equity” for purposes of securing any Grantor’s Guaranty of Canadian
Obligations (as defined in Section 2.1 below) to the extent such Voting Stock constitutes Remaining Canadian Pledged Stock.
“ Excluded Property ” means, collectively, (i) Excluded Equity, (ii) any permit or license or any Contractual Obligation entered into
by any Grantor (A) that prohibits or requires the consent of any Person other than a Grantor or its Affiliates which has not been obtained as a
condition to the creation by such Grantor of a Lien on any right, title or interest in such permit, license or Contractual Obligation or any Stock
or Stock Equivalent related thereto or (B) to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon,
but only, with respect to the prohibition in (A) and (B), to the extent, and for as long as, such prohibition is not terminated or rendered
unenforceable or otherwise deemed ineffective by the UCC or any other Requirement of Law, (iii) Property owned by any Grantor that is
subject to a purchase money Lien or a Capital Lease permitted under the Credit Agreement if the Contractual Obligation pursuant to which
such Lien is granted (or in the document providing for such Capital Lease) prohibits or requires the consent of any Person other than a Grantor
or its Affiliates which has not been obtained as a condition to the creation of any other Lien on such Property, (iv) any “intent to use”
Trademark applications for which a statement of use has not been filed (but only until such statement is filed), (v) assets and properties of the
Excluded Subsidiary and (vi) the partnership interests in the Excluded Subsidiary, to the extent the pledge of such partnership interests would
violate the Excluded Subsidiary’s partnership agreement or require the consent of Magna Aluminum, Inc., a California corporation (or any
subsequent holder of such partnership interests other than Real Alloy Acquisition and Real Alloy Recycling) that has not been obtained;
provided , however , “ Excluded Property ” shall not include any proceeds, products, substitutions or replacements of Excluded Property
(unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Property).
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“ Excluded Subsidiary ” means IMSAMET of Arizona, an Arizona general partnership, 70% of whose partnership interests are
owned by Aleris Recycling, Inc., a Delaware corporation, and 30% of whose partnership interests are owned by Magna Aluminum, Inc., a
California corporation.
“ Fraudulent Transfer Laws ” has the meaning set forth in Section 2.2 .
“ GE Capital ” has the meaning given such term in the preamble to this Agreement.
“ Grantors ” has the meaning given such term in the preamble to this Agreement.
“ Guaranteed Obligations ” has the meaning set forth in Section 2.1 .
“ Guarantor ” means each Grantor.
“ Guaranty ” means the guaranty of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement.
“ Guaranty of Canadian Obligations ” has the meaning set forth in Section 2.1 .
“ Indenture Documents ” has the meaning given such term in the Credit Agreement.
“ Insurance ” shall mean (i) all insurance policies covering any or all of the Collateral (regardless of whether or not Agent is the loss
payee thereof) and (ii) any key man life insurance policies.
“ Internet Domain Name ” means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of
Law in or relating to Internet domain names.
“ Material Intellectual Property ” means Intellectual Property that is owned by or licensed to a Grantor and material to the conduct
of any Grantor’s business.
“ Notes Collateral Agent ” has the meaning given such term in the Credit Agreement.
“ Notes Obligations ” has the meaning given such term in the Credit Agreement.
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“ Notes Priority Collateral ” has the meaning given such term in the Credit Agreement.
“ Pledged Certificated Stock ” means all certificated securities and any other Stock or Stock Equivalent of any Person evidenced by
a certificate, instrument or other similar document (as defined in the UCC), in each case owned by any Grantor, and any distribution of
property made on, in respect of or in exchange for the foregoing from time to time, including all Stock and Stock Equivalents listed on
Schedule 3 to this Agreement. Pledged Certificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in
Controlled Securities Accounts to the extent permitted by Section 5.9 hereof.
“ Pledged Collateral ” means, collectively, the Pledged Stock and the Pledged Debt Instruments.
“ Pledged Debt Instruments ” means all right, title and interest of any Grantor in instruments evidencing any Indebtedness owed to
such Grantor or other obligations owed to such Grantor, and any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, including all Indebtedness described on Schedule 3 to this Agreement, issued by the obligors named therein.
Pledged Debt Instruments excludes any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by
Section 5.9 hereof.
“ Pledged Investment Property ” means any investment property of any Grantor, and any distribution of property made on, in
respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments. Pledged Investment
Property excludes Excluded Equity and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by
Section 5.9 hereof.
“ Pledged Stock ” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
“ Pledged ULC Shares ” shall mean the Pledged Stock which are shares in the capital stock of a ULC.
“ Pledged Uncertificated Stock ” means any Stock or Stock Equivalent of any Person that is not Pledged Certificated Stock,
including all right, title and interest of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock
or as a member of any limited liability company, all right, title and interest of any Grantor in, to and under any Organization Document of any
partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, including in each case those interests set forth on Schedule 3 to this Agreement, to the extent such interests are not
certificated. Pledged Uncertificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities
Accounts to the extent permitted by Section 5.9 hereof.
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“ Remaining Canadian Pledged Stock ” means (a) all Voting Stock of the Canadian Borrower in excess of 65% of the outstanding
Voting Stock of the Canadian Borrower and (b) with respect to any Excluded Foreign Subsidiary directly owned by a Grantor, all Voting Stock
in excess of 65% of the outstanding Voting Stock of each Foreign Subsidiary.
“ Secured Obligations ” has the meaning given such term in Section 3.2 hereof.
“ Software ” means (a) all computer programs, including source code and object code versions, (b) all data, databases and
compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of
the foregoing.
“ Specified Assigned Agreement ” shall mean the Acquisition Agreement, as such agreement may be amended, supplemented or
otherwise modified from time to time.
“ UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in
the event that, by reason of mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of
Agent’s or any other Secured Party’s security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other
than the State of New York, “ UCC ” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such
provisions.
“ ULC ” shall mean any unlimited company, unlimited liability company or unlimited liability corporation or any similar entity
existing under the laws of any province or territory of Canada and any successor to any such entity.
“ U.S. Borrowers ” has the meaning given such term in the preamble to this Agreement.
“ Vehicles ” means all vehicles covered by a certificate of title law of any state.
“ Voting Stock ” means, with respect to any issuer, the issued and outstanding shares of each class of Stock of such issuer entitled to
vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).
Section 1.2 Certain Other Terms .
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(a) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The
terms “herein”, “hereof” and similar terms refer to this Agreement as a whole and not to any particular Article, Section or clause in this
Agreement. References herein to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article,
Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall
refer to such Grantor’s Collateral or any relevant part thereof.
(b) Other Interpretive Provisions .
(i) Defined Terms . Unless otherwise specified herein or therein, all terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered pursuant hereto.
(ii) The Agreement . The words “hereof”, “herein”, “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.
(iii) Certain Common Terms . The term “including” is not limiting and means “including without limitation.”
(iv) Performance; Time . Whenever any performance obligation hereunder (other than a payment obligation) shall be stated to
be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied on the next succeeding
Business Day. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.” If any provision
of this Agreement refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision
shall be interpreted to encompass any and all means, direct or indirect, of taking, or not taking, such action.
(v) Contracts . Unless otherwise expressly provided herein, references to agreements and other contractual instruments,
including this Agreement and the other Loan Documents, shall be deemed to include all subsequent amendments, thereto, restatements
and substitutions thereof and other modifications and supplements thereto which are in effect from time to time, but only to the extent
such amendments and other modifications are not prohibited by the terms of any Loan Document.
(vi) Laws . References to any statute or regulation are to be construed as including all statutory and regulatory provisions
related thereto or consolidating, amending, replacing, supplementing or interpreting the statute or regulation.
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ARTICLE II
GUARANTY
Section 2.1 Guaranty . To induce the Lenders to make the Loans, the L/C Issuers to Issue Letters of Credit and each other Secured Party
to make credit available to or for the benefit of one or more Grantors, each Guarantor hereby, jointly and severally, absolutely, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or
earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations, including
all the Canadian Obligations, in any case, whether existing on the date hereof or hereinafter incurred or created (such guaranty of the Canadian
Obligations, the “ Guaranty of Canadian Obligations ” and all Obligations, generally, the “ Guaranteed Obligations ”). This Guaranty by each
Guarantor hereunder constitutes a guaranty of payment and not of collection.
Section 2.2 Limitation of Guaranty . Any term or provision of this Guaranty or any other Loan Document to the contrary notwithstanding,
the maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount for which such
Guarantor can be liable without rendering this Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance
under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act and Section 548 of Title 11 of the United States Code or any applicable provisions of comparable
Requirements of Law) (collectively, “ Fraudulent Transfer Laws ”). Any analysis of the provisions of this Guaranty for purposes of Fraudulent
Transfer Laws shall take into account the right of contribution established in Section 2.3 and, for purposes of such analysis, give effect to any
discharge of intercompany debt as a result of any payment made under the Guaranty.
Section 2.3 Contribution . To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation
exceeding the greater of (a) the amount of the economic benefits actually received by such Guarantor and its Subsidiaries from the Loans, the
Letter of Credit Obligations and other Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid
the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by a Borrower that received the benefit of the funds
advanced that constituted Guaranteed Obligations and Holdings) in the same proportion as such Guarantor’s net worth on the date enforcement
is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other
Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.
8
Section 2.4 Authorization; Other Agreements . The Secured Parties are hereby authorized, without notice to or demand upon any
Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability
hereunder, from time to time, to do each of the following:
(a) (i) subject to compliance, if applicable, with Section 9.1 of the Credit Agreement, modify, amend, supplement or otherwise
change, (ii) accelerate or otherwise change the time of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed
Obligation or any Loan Document;
(b) apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such
order as provided in the Loan Documents;
(c) refund at any time any payment received by any Secured Party in respect of any Guaranteed Obligation;
(d) (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept,
substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty
therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any
one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner
with a Borrower or any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and
(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.
The Guarantors agree that the Secured Parties may take any action or refrain from taking any action specified in the Canadian Revolving
Guaranty and Security Agreement (including without limitation Section 2.3 thereof) without discharging or otherwise affecting the obligations
of any Guarantor hereunder.
Section 2.5 Guaranty Absolute and Unconditional . Each Guarantor hereby waives and agrees not to assert any defense, whether arising
in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Guaranty are irrevocable,
absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not be pleaded
and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in
writing by Agent):
(a) the invalidity or unenforceability of any obligation of a Borrower or any other Guarantor under any Loan Document or any other
agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any
Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the
Guaranteed Obligations or any part thereof;
9
(b) the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from a Borrower or any other Guarantor
or other action to enforce the same or (ii) any action to enforce any Loan Document or any Lien thereunder;
(c) the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any
Collateral;
(d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against a
Borrower, any other Guarantor or any of a Borrower’s other Subsidiaries or any procedure, agreement, order, stipulation, election, action or
omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest
thereon) in or as a result of any such proceeding;
(e) any foreclosure, whether or not through judicial sale, and any other sale or other disposition of any Collateral or any election
following the occurrence of an Event of Default by any Secured Party to proceed separately against any Collateral in accordance with such
Secured Party’s rights under any applicable Requirement of Law;
(f) the failure of Agent or any other Secured Party to assert any claim or demand or to exercise or enforce any right or remedy under
the provisions of any Loan Document or otherwise;
(g) any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge
of a Borrower, any other Guarantor or any other Subsidiary of a Borrower, in each case other than the payment in full of the Guaranteed
Obligations; or
(h) any of the items specified in Section 2.4 of the Canadian Revolving Guaranty and Security Agreement.
Section 2.6 Waivers . Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff
or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following:
(a) any demand for payment or performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment, demand,
protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest
thereon) becoming immediately due and payable; and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any
defense arising by reason of any disability or other defense of a Borrower or any other Guarantor. Each Guarantor further unconditionally and
irrevocably agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar
right against a
10
Borrower or any other Guarantor by reason of any Loan Document or any payment made thereunder or (y) assert any claim, defense, setoff or
counterclaim it may have against any other Credit Party or set off any of its obligations to such other Credit Party against obligations of such
Credit Party to such Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete performance. Each
Guarantor further waives any right such Guarantor may have under any applicable Requirement of Law to require any Secured Party to seek
recourse first against any Borrower or any other Person, or to realize upon any Collateral for any of the Obligations, as a condition precedent to
enforcing such Guarantor’s liability and obligations under this Guaranty.
Section 2.7 Reliance . Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of each
Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other
circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and
each Guarantor hereby agrees that no Secured Party shall have any duty to advise any Guarantor of information known to it regarding such
condition or any such circumstances. In the event any Secured Party, in its sole discretion, undertakes at any time or from time to time to
provide any such information to any Guarantor, such Secured Party shall be under no obligation to (a) undertake any investigation not a part of
its regular business routine, (b) disclose any information that such Secured Party, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any
Guarantor.
ARTICLE III
GRANT OF SECURITY INTEREST
Section 3.1 Collateral . For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by
a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the “
Collateral ”:
(a) all Accounts, chattel paper, deposit accounts, documents (as defined in the UCC), equipment, general intangibles, instruments,
Insurance, Inventory, investment property, letter of credit rights, money and any supporting obligations related to any of the foregoing;
(b) the commercial tort claims described on Schedule 1 to this Agreement and on any supplement thereto received by Agent
pursuant to Section 5.8 ;
(c) all books and records pertaining to the other property described in this Section 3.1 ;
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(d) Specified Assigned Agreement;
(e) all property of such Grantor held by any Secured Party, including all property of every description, in the custody of or in transit
to such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor
may have any right or power, including but not limited to cash;
(f) all other goods (including but not limited to fixtures) and personal property of such Grantor, whether tangible or intangible and
wherever located; and
(g) to the extent not otherwise included, all proceeds, products, accessions, rents and profits of or in respect of any of the foregoing.
Section 3.2 Grant of Security Interest in Collateral . Each Grantor, as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise) of all the Obligations of such Grantor or any or all of the other
Grantors, including the Guaranty of Canadian Obligations (collectively, the “ Secured Obligations ”), hereby mortgages, pledges and
hypothecates to Agent, for the benefit of the Secured Parties, and grants to Agent, for the benefit of the Secured Parties a Lien on and security
interest in, all of its right, title and interest in, to and under the Collateral of such Grantor; provided , however , notwithstanding the foregoing,
no Lien or security interest is hereby granted on any Excluded Property; provided , further , that if and when any property shall cease to be
Excluded Property, a Lien on and security interest in such property shall be deemed granted therein; provided , further , the foregoing grant of
security interest in Collateral is expressly intended to include, and does include, a grant of a security interest in, pledge of and Lien on all
Remaining Canadian Pledged Stock but only to secure the Grantors’ Guaranty of Canadian Obligations. In the interest of certainty, all
Remaining Canadian Pledged Stock shall be and hereby is pledged solely to secure the Guaranty of Canadian Obligations and shall not in any
event secure or be deemed to secure any U.S. Obligation or any other Obligation of a U.S. Credit Party. Each Grantor hereby represents and
warrants that the Excluded Property, when taken as a whole, is not material to the business operations or financial condition of the Grantors,
taken as a whole.
Section 3.3 Intercreditor Agreement . (a) Notwithstanding anything herein to the contrary, the Liens granted to Agent under this
Agreement and the exercise of the rights and remedies of Agent hereunder and under any other Loan Document are subject to the provisions of
the Intercreditor Agreement. Notwithstanding anything to the contrary herein, Agent acknowledges and agrees that no Grantor shall be required
to take or refrain from taking any action with respect to the Collateral if such action or inaction would be inconsistent with the terms of the
Intercreditor Agreement.
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(b) Subject to the foregoing, to the extent the provisions of this Agreement (or any other Collateral Documents) require the delivery
of, or control over, Notes Priority Collateral to be granted to Agent, the notation of any Lien on any certificate of title, bill of lading or other
document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person, in
each case, in connection with any Notes Priority Collateral, at any time prior to the Discharge of Notes Obligations, such requirements shall be
satisfied by delivery of such Notes Priority Collateral (or control with respect thereto (and any related approval or consent rights)) to the Notes
Collateral Agent or, with respect to such notation, giving of notice, provision of voting rights or obtaining consent, compliance with the
applicable provisions of the Indenture Documents, to be held in accordance with the Indenture Documents and subject to the terms of the
Intercreditor Agreement. Furthermore, at all times prior to the Discharge of Notes Obligations, Agent is authorized by the parties hereto to
effect transfers of Notes Priority Collateral at any time in its possession (and any “control” or similar agreements with respect to the Notes
Priority Collateral) to the Notes Collateral Agent.
(c) Notwithstanding anything to the contrary herein, but subject to the terms of the Intercreditor Agreement, in the event the
Indenture Documents provide for the grant of a security interest or pledge over the assets of any Grantor and such assets do not otherwise
constitute Collateral (or are not required to be perfected) under this Agreement or any other Loan Document, such Grantor shall (i) promptly
grant a security interest in or pledge such assets to secure the Secured Obligations, (ii) promptly take any actions necessary to perfect such
security interest or pledge to the same extent required in the Indenture Documents and (iii) take all other steps reasonably requested by Agent
in connection with the foregoing.
(d) Except as otherwise provided in this Section 3.3 or in the Intercreditor Agreement, nothing contained in the Intercreditor
Agreement shall be deemed to modify any of the provisions of this Agreement, which, as among the Grantors and Agent shall remain in full
force and effect in accordance with its terms.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the L/C Issuers and Agent to enter into the Loan Documents, each Grantor hereby represents and warrants each of
the following to Agent, the Lenders, the L/C Issuers and the other Secured Parties:
Section 4.1 Title; No Other Liens . Except for the Lien granted to Agent pursuant to this Agreement and other Permitted Liens under any
Loan Document (including Section 4.2 ), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others.
Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) has
rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.
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Section 4.2 Perfection and Priority . The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected
security interest in favor of Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (a) in the case of all
Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other
actions specified on Schedule 2 to this Agreement (which, in the case of all filings and other documents referred to on such schedule, have been
delivered to Agent in completed and duly authorized form), (b) with respect to any deposit, securities, commodity or similar account other than
Excluded Accounts, the execution of Control Agreements, (c) in the case of all Copyrights, Trademarks and Patents for which UCC filings are
insufficient, all appropriate filings having been made with the United States Copyright Office or the United States Patent and Trademark
Office, as applicable, (d) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a Contractual
Obligation granting control to Agent over such letter-of-credit rights, (e) in the case of electronic chattel paper, the completion of all steps
necessary to grant control to Agent over such electronic chattel paper and (f) in the case of Vehicles, the actions required under Section 5.1(e) .
Such security interest shall be prior to all other Liens on the Collateral except for (x) Permitted Liens having priority over Agent’s Lien by
operation of law or permitted pursuant to Section 5.1(e) , 5.1(g) , 5.1(h) , 5.1(i) or 5.1(k) of the Credit Agreement upon (i) in the case of all
Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property, the delivery thereof to Agent (or the Notes Collateral
Agent pursuant to the Intercreditor Agreement) of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property
consisting of instruments and certificates, in each case properly endorsed for transfer to Agent (or the Notes Collateral Agent pursuant to the
Intercreditor Agreement) or in blank, (ii) in the case of all Pledged Investment Property not in certificated form, the execution of Control
Agreements with respect to such investment property and (iii) in the case of all other instruments and tangible chattel paper that are not Pledged
Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery to Agent (or the Notes Collateral Agent pursuant to
the Intercreditor Agreement) of such instruments and tangible chattel paper and (y) subject to the terms of the Intercreditor Agreement, Liens
granted to the Notes Collateral Agent on the Notes Priority Collateral pursuant to the Indenture Documents or to any other agent or trustee
pursuant to any Permitted Refinancing in respect of the Notes Obligations. Except as set forth in this Section 4.2 , all actions by each Grantor
necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.
Section 4.3 Pledged Collateral . (a) The Pledged Stock (i) pledged by such Grantor hereunder (A) is listed on Schedule 3 to this
Agreement and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on such
Schedule 3 and (B) has been duly authorized, validly issued and is fully paid and nonassessable (other than Pledged Stock in limited liability
companies and partnerships) and (ii) the pledge thereof constitutes the legal, valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms.
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(b) As of the Closing Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property
consisting of instruments and certificates has been delivered to the Notes Collateral Agent in accordance with Section 5.2(a) .
(c) Subject to Section 8.13 , upon the occurrence and during the continuance of an Event of Default, Agent shall be entitled to
exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock
shall become a holder of such Pledged Stock to the same extent as such Grantor and be entitled to participate in the management of the issuer
of such Pledged Stock and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder
of such Pledged Stock.
Section 4.4 Instruments and Tangible Chattel Paper Formerly Accounts . No amount payable to such Grantor under or in connection with
any account is evidenced by any instrument or tangible chattel paper that has not been delivered to Agent, properly endorsed for transfer, to the
extent delivery is required by Section 5.5(a) .
Section 4.5 Intellectual Property . On the Closing Date, all Material Intellectual Property owned by such Grantor is valid, in full force and
effect, subsisting, unexpired and enforceable, and no Material Intellectual Property has been abandoned. No breach or default of any material
IP License shall be caused by any of the following, and none of the following shall limit or impair the ownership, use, validity or enforceability
of, or any rights of such Grantor in, any Material Intellectual Property: (i) the consummation of the transactions contemplated by any Loan
Document or (ii) any holding, decision, judgment or order rendered by any Governmental Authority prior to the date hereof. There are no
pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or
disputes challenging the ownership, use, validity, enforceability of, or such Grantor’s rights in, any Material Intellectual Property of such
Grantor. To such Grantor’s knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any
Intellectual Property of such Grantor. Such Grantor, and to such Grantor’s knowledge each other party thereto, is not in material breach or
default of any material IP License.
Section 4.6 Commercial Tort Claims . The only commercial tort claims of any Grantor existing on the date hereof (regardless of whether
the amount, defendant or other material facts can be determined and regardless of whether such commercial tort claim has been asserted,
threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed
on Schedule 1 to this Agreement, which sets forth such information separately for each Grantor.
Section 4.7 Specific Collateral . None of the Collateral is or is proceeds or products of farm products, as-extracted collateral,
health-care-insurance receivables or timber to be cut.
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Section 4.8 Enforcement . No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from any
Person is required for the exercise by Agent of its rights (including voting rights) provided for in this Agreement or the enforcement of
remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as may be required in
connection with the disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any
approvals that may be required to be obtained from any bailees or landlords to collect the Collateral.
Section 4.9 Representations and Warranties of the Credit Agreement . The representations and warranties as to such Grantor and its
Subsidiaries made in Article III (Representations and Warranties) of the Credit Agreement are true and correct on each date as required by
Section 2.2 of the Credit Agreement.
ARTICLE V
COVENANTS
Each Grantor agrees with Agent to the following, as long as any Obligation or Commitment remains outstanding (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been asserted):
Section 5.1 Maintenance of Perfected Security Interest; Further Documentation and Consents . (a) Generally . Such Grantor shall (i) not
use or permit any Collateral to be used unlawfully or in violation of any provision of any Loan Document, any Related Agreement, any
Requirement of Law or any policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation or undertaking
restricting the right or ability of such Grantor or Agent to sell, assign, convey or transfer any Collateral if such restriction would reasonably be
expected to have, either individually or in the aggregate, a Material Adverse Effect.
(b) Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the
priority described in Section 4.2 and shall defend such security interest and such priority against the claims and demands of all Persons.
(c) Such Grantor shall furnish to Agent from time to time statements and schedules further identifying and describing the Collateral
and such other documents in connection with the Collateral, in each case as Agent may reasonably request, all in reasonable detail and in form
and substance satisfactory to Agent.
(d) At any time and from time to time, upon the written request of Agent, such Grantor shall, for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have
recorded, such further documents, including an
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authorization to file (or, as applicable, the filing of) any financing statement or amendment under the UCC (or other filings under similar
Requirements of Law) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as Agent
may reasonably request, including (A) using commercially reasonable efforts to secure all approvals necessary or appropriate for the
assignment to or for the benefit of Agent of any Contractual Obligation, including any IP License, held by such Grantor and to enforce the
security interests granted hereunder and (B) executing and delivering any Control Agreements with respect to deposit accounts, securities,
commodity or similar accounts.
(e) If reasonably requested by Agent during the continuance of an Event of Default, the Grantor shall arrange for Agent’s first
priority security interest to be noted on the certificate of title of each Vehicle and shall file any other necessary documentation in each
jurisdiction that Agent shall deem advisable to perfect its security interests in any Vehicle.
(f) To ensure that a Lien and security interest is granted on any of the Excluded Property set forth in clause (ii) of the definition of “
Excluded Property ”, such Grantor shall use commercially reasonable efforts to obtain any required consents from any Person other than a
Borrower and its Affiliates with respect to any permit or license or any Contractual Obligation with such Person entered into by such Grantor
that requires such consent as a condition to the creation by such Grantor of a Lien on any right, title or interest in such permit, license or
Contractual Obligation or any Stock or Stock Equivalent related thereto.
Section 5.2 Pledged Collateral . (a) Delivery of Pledged Collateral . Such Grantor shall (i) deliver to Agent, in suitable form for transfer
and in form and substance satisfactory to Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates
and instruments evidencing Pledged Investment Property and (ii) maintain all other Pledged Investment Property in a Controlled Securities
Account.
(b) Event of Default . During the continuance of an Event of Default, Agent shall have the right, at any time in its discretion and
without notice to the Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged
Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged
Investment Property for certificates or instruments of smaller or larger denominations.
(c) Cash Distributions with respect to Pledged Collateral . Except as provided in Article VI and subject to the limitations set forth in
the Credit Agreement, such Grantor shall be entitled to receive all cash distributions paid in respect of the Pledged Collateral.
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(d) Voting Rights . Except as provided in Article VI , such Grantor shall be entitled to exercise all voting, consent and corporate,
partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided , however , that no vote shall be cast,
consent given or right exercised or other action taken by such Grantor that would impair the Collateral or be inconsistent with or result in any
violation of any provision of any Loan Document.
(e) Foreign Pledge Stock . If any issuer of any Pledged Stock is organized under a jurisdiction outside of the United States, each
Grantor shall take such additional actions, including, without limitation, causing the issuer to register the pledge on its books and records or
making such filings or recordings, in each case as may be reasonably necessary or advisable, under the laws of such issuer’s jurisdiction to
ensure the validity, perfection and priority of the security interest of Agent in such Pledged Stock.
(f) Pledged Stock . With respect to any Pledged Stock constituting partnership interests or limited liability company interests
included in the Collateral, if the Grantors collectively own less than 100% of the equity interests in any issuer of such Pledged Stock, Grantors
shall use their commercially reasonable efforts to obtain the consent of each other holder of partnership interest or limited liability company
interests in such issuer to the security interest of Agent hereunder and following an Event of Default, the transfer of such Pledged Stock to
Agent or its designee, and to the substitution of Agent or its designee as a partner or member with all the rights and powers related thereto.
Each Grantor consents to the grant by each other Grantor of a Lien in all Collateral to Agent and without limiting the generality of the
foregoing consents to the transfer of any Pledged Stock to Agent or its designee following and during the continuance of an Event of Default
and to the substitution of Agent or its designee as a partner in any partnership or as a member in any limited liability company with all the
rights and powers related thereto.
Section 5.3 Accounts .
(a) Such Grantor shall not, other than in the Ordinary Course of Business, (i) grant any extension of the time of payment of any
account, (ii) compromise or settle any account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the
payment of any account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify any account in any manner that
could adversely affect the value thereof.
(b) So long as an Event of Default is continuing, Agent shall have the right to make test verifications of the Accounts in any manner
and through any medium that it reasonably considers advisable, and such Grantor shall furnish all such assistance and information as Agent
may reasonably require in connection therewith. At any time and from time to time, upon Agent’s reasonable request during an Event of
Default, such Grantor shall cause independent public accountants or others satisfactory to Agent to furnish to Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the Accounts.
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Section 5.4 Commodity Contracts . Such Grantor shall not have any commodity contract unless subject to a Control Agreement.
Section 5.5 Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and
Electronic Chattel Paper . (a) If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become
evidenced by an instrument or tangible chattel paper other than such instrument delivered in accordance with Section 5.2(a) and in the
possession of Agent, such Grantor shall mark all such instruments and tangible chattel paper with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the security interest of General Electric Capital Corporation, as Agent” and, at the
request of Agent, shall immediately deliver such instrument or tangible chattel paper to Agent, duly indorsed in a manner satisfactory to Agent.
(b) Such Grantor shall not grant “control” (within the meaning of such term under Article 9-106 of the UCC) over any investment
property of such Grantor to any Person other than Agent and the Notes Collateral Agent.
(c) If such Grantor is or becomes the beneficiary of a letter of credit that is not a supporting obligation of any Collateral, such
Grantor shall promptly, and in any event within 2 Business Days after becoming a beneficiary, notify Agent thereof and enter into a
Contractual Obligation with Agent, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under
such letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights to Agent and such assignment shall be sufficient to
grant control for the purposes of Section 9-107 of the UCC (or any similar section under any equivalent UCC). Such Contractual Obligation
shall also direct all payments thereunder to a Cash Collateral Account. The provisions of the Contractual Obligation shall be in form and
substance reasonably satisfactory to Agent.
(d) If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by
electronic chattel paper, such Grantor shall take all steps necessary to grant Agent control of all such electronic chattel paper for the purposes of
Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all “transferable records” as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.
Section 5.6 Intellectual Property . (a) Within 30 days after any change to Schedule 3.16 to the Credit Agreement for such Grantor, such
Grantor shall provide Agent notification thereof and the short-form intellectual property agreements and assignments as described in this
Section 5.6 and any other documents that Agent reasonably requests with respect thereto.
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(b) Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each Trademark included in the Material
Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark
is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services
offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other
notices and legends required by applicable Requirements of Law, (4) not adopt or use any other Trademark that is confusingly similar or a
colorable imitation of such Trademark unless Agent shall obtain a perfected security interest in such other Trademark pursuant to this
Agreement and (ii) not do any act or omit to do any act whereby (w) such Trademark (or any goodwill associated therewith) may become
destroyed, invalidated, impaired or harmed in any way, (x) any Patent included in the Material Intellectual Property may become forfeited,
misused, unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights included in the Material Intellectual Property
may become invalidated, otherwise impaired or fall into the public domain or (z) any Trade Secret that is Material Intellectual Property may
become publicly available or otherwise unprotectable.
(c) Such Grantor shall notify Agent immediately if it knows, or has reason to know, that any application or registration relating to
any Material Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse
determination or development regarding the validity or enforceability or such Grantor’s ownership of, interest in, right to use, register, own or
maintain any Material Intellectual Property (including the institution of, or any such determination or development in, any proceeding relating
to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by Agent to
maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation
included in the Material Intellectual Property.
(d) Such Grantor shall not knowingly do any act or omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair
the Intellectual Property of any other Person. In the event that any Material Intellectual Property of such Grantor is or has been infringed,
misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take such action as it reasonably deems appropriate
under the circumstances in response thereto, including (if reasonably deemed appropriate by such Grantor) promptly bringing suit and
recovering all damages therefor.
(e) Such Grantor shall execute and deliver to Agent in form and substance reasonably acceptable to Agent and suitable for (i) filing
in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 3 for all Copyrights,
Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the appropriate Internet domain name registrar, a duly executed
form of assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested
by Agent).
Section 5.7 Notices . Such Grantor shall promptly notify Agent in writing of its acquisition of any interest hereafter in property that is of a
type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal statute or
regulation.
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Section 5.8 Notice of Commercial Tort Claims . Such Grantor agrees that, if it shall acquire any interest in any commercial tort claim
(whether from another Person or because such commercial tort claim shall have come into existence), (i) such Grantor shall, immediately upon
such acquisition, deliver to Agent, in each case in form and substance satisfactory to Agent, a notice of the existence and nature of such
commercial tort claim and a supplement to Schedule 1 to this Agreement containing a specific description of such commercial tort claim,
(ii) Section 3.1 shall apply to such commercial tort claim and (iii) such Grantor shall execute and deliver to Agent, in each case in form and
substance satisfactory to Agent, any document, and take all other action, deemed by Agent to be reasonably necessary or appropriate for Agent
to obtain, for the benefit of the Secured Parties, a perfected security interest having at least the priority set forth in Section 4.2 in all such
commercial tort claims. Any supplement to Schedule 1 delivered pursuant to this Section 5.8 shall, after the receipt thereof by Agent, become
part of Schedule 1 for all purposes hereunder other than in respect of representations and warranties made prior to the date of such receipt.
Section 5.9 Controlled Securities Account . Each Grantor shall, to the extent required by Section 4.11 of the Credit Agreement, deposit all
of its Cash Equivalents in securities accounts that are Controlled Securities Accounts in accordance with Section 4.11 of the Credit Agreement.
ARTICLE VI
REMEDIAL PROVISIONS
Section 6.1 Code and Other Remedies . (a) UCC Remedies . During the continuance of an Event of Default, Agent may exercise, in
addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or
relating to any Secured Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.
(b) Disposition of Collateral . Without limiting the generality of the foregoing, Agent may, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor
or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any
Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any
obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other
Person notice or opportunity for a hearing on Agent’s claim or action, (ii) collect, receive, appropriate and realize upon any Collateral and
(iii) sell, assign, convey, transfer, grant option or options to purchase and deliver any Collateral
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(and enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange,
broker’s board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Agent shall have the right, upon any such
public sale or sales and, to the extent permitted by the UCC and other applicable Requirements of Law, upon any such private sale, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived
and released.
(c) Management of the Collateral . Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at Agent’s
request, it shall assemble the Collateral and make it available to Agent at places that Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere, (ii) without limiting the foregoing, Agent also has the right to require that each Grantor store and keep any Collateral
pending further action by Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until Agent is able to sell, assign, convey or
transfer any Collateral, Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of
preserving the Collateral or its value or for any other purpose deemed appropriate by Agent and (iv) Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of any Collateral and to enforce any of Agent’s remedies (for the benefit of the Secured
Parties), with respect to such appointment without prior notice or hearing as to such appointment. Agent shall not have any obligation to any
Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the
possession of Agent.
(d) Application of Proceeds . Agent shall apply the cash proceeds of any action taken by it pursuant to this Section 6.1 , after
deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any
Collateral or in any way relating to the Collateral or the rights of Agent and any other Secured Party hereunder, including reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Credit Agreement, and only after such
application and after the payment by Agent of any other amount required by any Requirement of Law, need Agent account for the surplus, if
any, to any Grantor.
(e) Direct Obligation . Neither Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust
any right or remedy against, any Grantor, any other Credit Party or any other Person with respect to the payment of the Obligations or to pursue
or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof. All of the rights and remedies
of Agent and any other Secured Party under any Loan Document shall be cumulative, may be exercised individually or concurrently and not
exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully
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do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against Agent
or any other Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may
have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other
disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such
sale or other disposition.
(f) Commercially Reasonable . To the extent that applicable Requirements of Law impose duties on Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for Agent to do any of the
following:
(i) fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by Agent to prepare any Collateral
for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;
(ii) fail to obtain Permits, or other consents, for access to any Collateral to sell or for the collection or sale of any Collateral,
or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any
Collateral;
(iii) fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any
Collateral or to remove any adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through publications or media of general circulation, whether or not such
Collateral is of a specialized nature, or to contact other Persons, whether or not in the same business as any Grantor, for expressions of
interest in acquiring any such Collateral;
(v) exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the
use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any
Collateral, whether or not such Collateral is of a specialized nature, or, to the extent deemed appropriate by Agent, obtain the services of
other brokers, investment bankers, consultants and other professionals to assist Agent in the collection or disposition of any Collateral, or
utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets to dispose of any Collateral;
(vi) dispose of assets in wholesale rather than retail markets;
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(vii) disclaim disposition warranties, such as title, possession or quiet enjoyment; or
(viii) purchase insurance or credit enhancements to insure Agent against risks of loss, collection or disposition of any
Collateral or to provide to Agent a guaranteed return from the collection or disposition of any Collateral.
Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list of actions or omissions that are
commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by any Secured Party shall not be
deemed commercially unreasonable solely on account of not being indicated in this Section 6.1 . Without limitation upon the foregoing,
nothing contained in this Section 6.1 shall be construed to grant any rights to any Grantor or to impose any duties on Agent that would not have
been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6.1 .
(g) IP Licenses . For the purpose of enabling Agent to exercise rights and remedies under this Section 6.1 (including in order to take
possession of, collect, receive, assemble, process, appropriate, remove, realize upon, sell, assign, convey, transfer or grant options to purchase
any Collateral) at such time as Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to Agent, for
the benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or other
compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or
hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and
programs used for the compilation or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such
Grantor) to use, operate and occupy all real Property owned, operated, leased, subleased or otherwise occupied by such Grantor.
Section 6.2 Accounts and Payments in Respect of General Intangibles . (a) In addition to, and not in substitution for, any similar
requirement in the Credit Agreement, if required by Agent at any time during the continuance of an Event of Default, any payment of Accounts
or payment in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event, within 2 Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such Grantor to Agent, in a Cash Collateral Account, subject to
withdrawal by Agent as provided in Section 6.4 . Until so turned over, such payment shall be held by such Grantor in trust for Agent,
segregated from other funds of such Grantor. Each such deposit of proceeds of Accounts and payments in respect of general intangibles shall
be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.
(b) At any time during the continuance of an Event of Default:
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(i) each Grantor shall, upon Agent’s request, deliver to Agent all original and other documents evidencing, and relating to, the
Contractual Obligations and transactions that gave rise to any Account or any payment in respect of general intangibles, including all
original orders, invoices and shipping receipts and notify account debtors that the Accounts or general intangibles have been collaterally
assigned to Agent and that payments in respect thereof shall be made directly to Agent;
(ii) Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under general intangibles or any thereof and, in its own name or in the name of others,
communicate with account debtors to verify with them to Agent’s satisfaction the existence, amount and terms of any Account or
amounts due under any general intangible. In addition, during the continuance of an Event of Default, Agent may at any time enforce
such Grantor’s rights against such account debtors and obligors of general intangibles; and
(iii) each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested
by Agent to ensure any Internet Domain Name is registered.
(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each Account and each payment in
respect of general intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. No Secured Party shall have any obligation or liability under any agreement
giving rise to an Account or a payment in respect of a general intangible by reason of or arising out of any Loan Document or the receipt by
any Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any
Grantor under or pursuant to any agreement giving rise to an Account or a payment in respect of a general intangible, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have
been assigned to it or to which it may be entitled at any time or times.
Section 6.3 Pledged Collateral . (a) Voting Rights . Subject to Section 8.13 , during the continuance of an Event of Default, upon notice
by Agent to the relevant Grantor or Grantors, Agent or its nominee may exercise (i) any voting, consent, corporate and other right pertaining to
the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged
Collateral or otherwise and (ii) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the
Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the
merger, amalgamation, consolidation, reorganization, recapitalization
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or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged
Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as Agent may
determine), all without liability except to account for property actually received by it; provided , however , that Agent shall have no duty to any
Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
(b) Proxies . In order to permit Agent to exercise the voting and other consensual rights that it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute
and deliver (or cause to be executed and delivered) to Agent all such proxies, dividend payment orders and other instruments as Agent may
from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to Agent an irrevocable
proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the
Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may
be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be
effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the
issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an
Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been asserted).
(c) Authorization of Issuers . Each Grantor hereby expressly and irrevocably authorizes and instructs, without any further
instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction
received by it from Agent in writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this
Agreement and each Grantor agrees that such issuer shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless
otherwise expressly permitted hereby or the Credit Agreement, pay any dividend or make any other payment during the continuance of an
Event of Default with respect to the Pledged Collateral directly to Agent.
Section 6.4 Proceeds to be Turned over to and Held by Agent . Unless otherwise expressly provided in the Credit Agreement or this
Agreement, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust
for Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be
turned over to Agent in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of
any Collateral received by Agent in cash or Cash Equivalents shall be held by Agent in a Cash Collateral Account. All proceeds being held by
Agent in a Cash Collateral Account (or by such Grantor in trust for Agent) shall continue to be held as collateral security for the Secured
Obligations and shall not constitute payment thereof until applied as provided in the Credit Agreement.
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Section 6.5 Sale of Pledged Collateral . (a) Each Grantor recognizes that Agent may be unable to effect a public sale of any Pledged
Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may
determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private
sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private
sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that
any such private sale shall be deemed to have been made in a commercially reasonable manner. Agent shall be under no obligation to delay a
sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the
Securities Act or under applicable state securities laws even if such issuer would agree to do so.
(b) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or
sales of any portion of the Pledged Collateral pursuant to Section 6.1 hereof and this Section 6.5 valid and binding and in compliance with all
applicable Requirements of Law. Each Grantor further agrees that a breach of any covenant contained herein will cause irreparable injury to
Agent and other Secured Parties, that Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained herein shall be specifically enforceable against such Grantor, and such Grantor hereby
waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement. Each Grantor waives any and all rights of contribution or subrogation upon the sale or
disposition of all or any portion of the Pledged Collateral by Agent.
Section 6.6 Deficiency . Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any
Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by Agent or any other
Secured Party to collect such deficiency.
ARTICLE VII
AGENT
Section 7.1 Agent’s Appointment as Attorney-in-Fact . (a) Each Grantor hereby irrevocably constitutes and appoints Agent and any
Related Person thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable
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power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out
the terms of the Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable
to accomplish the purposes of the Loan Documents, and, without limiting the generality of the foregoing, each Grantor hereby gives Agent and
its Related Persons the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when
an Event of Default shall be continuing:
(i) in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft,
note, acceptance or other instrument for the payment of moneys due under any Account or general intangible or with respect to any other
Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by
Agent for the purpose of collecting any such moneys due under any Account or general intangible or with respect to any other Collateral
whenever payable;
(ii) in the case of any Intellectual Property owned by or licensed to such Grantor, execute, deliver and have recorded any
document that Agent may request to evidence, effect, publicize or record Agent’s security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay any
insurance called for by the terms of the Credit Agreement (including all or any part of the premiums therefor and the costs thereof);
(iv) execute, in connection with any sale provided for in Section 6.1 hereof or 6.5 hereof, any document to effect or otherwise
necessary or appropriate in relation to evidence the sale of any Collateral;
(v) (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due
thereunder directly to Agent or as Agent shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any
moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse
any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and
other document in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any
court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any actions,
suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect to any Collateral, (F) settle,
compromise or adjust any such actions, suits, proceedings,
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audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as Agent may deem appropriate,
(G) assign any Intellectual Property owned by such Grantor or any IP Licenses of such Grantor throughout the world on such terms and
conditions and in such manner as Agent shall in its sole discretion determine, including the execution and filing of any document
necessary to effectuate or record such assignment and (H) generally, sell, assign, convey, transfer or grant a Lien on, make any
Contractual Obligation with respect to and otherwise deal with, any Collateral as fully and completely as though Agent were the absolute
owner thereof for all purposes and do, at Agent’s option, at any time or from time to time, all acts and things that Agent deems necessary
to protect, preserve or realize upon any Collateral and the Secured Parties’ security interests therein and to effect the intent of the Loan
Documents, all as fully and effectively as such Grantor might do; or
(vi) If any Grantor fails to perform or comply with any Contractual Obligation contained herein, Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such Contractual
Obligation.
(b) The out-of-pocket expenses of Agent incurred in connection with actions undertaken as provided in this Section 7.1 , together
with interest thereon at a rate set forth in Section 1.3(c) of the Credit Agreement, from the date of payment by Agent to the date reimbursed by
the relevant Grantor, shall be payable by such Grantor to Agent on demand.
(c) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7.1 . All
powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is
terminated and the security interests created hereby are released.
Section 7.2 Authorization to File Financing Statements . Each Grantor authorizes Agent and its Related Persons, at any time and from
time to time, to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to
any Collateral in such form and in such offices as Agent reasonably determines appropriate to perfect, or continue or maintain perfection of, the
security interests of Agent under this Agreement, and such financing statements and amendments may describe the Collateral covered thereby
as “all assets” or “all assets of the debtor” or words of similar import. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Such Grantor
also hereby ratifies its authorization for Agent to have filed any initial financing statement or amendment thereto under the UCC (or other
similar laws) in effect in any jurisdiction if filed prior to the date hereof. Each Grantor hereby (i) waives any right under the UCC or any other
Requirement of Law to receive notice and/or copies of any filed or recorded financing statements, amendments thereto, continuations thereof or
termination statements and (ii) releases and excuses each Secured Party from any obligation under the UCC or any other Requirement of Law
to provide notice or a copy of any such filed or recorded documents.
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Section 7.3 Authority of Agent . Each Grantor acknowledges that the rights and responsibilities of Agent under this Agreement with
respect to any action taken by Agent or the exercise or non-exercise by Agent of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Agreement shall, as between Agent and the other Secured Parties, be governed by
the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between Agent
and any Grantor, Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.
Section 7.4 Duty; Obligations and Liabilities . (a) Duty of Agent. Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession shall be to deal with it in the same manner as Agent deals with similar property for its own
account. The powers conferred on Agent hereunder are solely to protect Agent’s interest in the Collateral, for the benefit of the Secured Parties,
and shall not impose any duty upon Agent to exercise any such powers. Agent shall be accountable only for amounts that it receives as a result
of the exercise of such powers, and neither it nor any of its Related Persons shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition,
Agent shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act
or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by Agent in good
faith.
(b) Obligations and Liabilities with respect to Collateral . No Secured Party and no Related Person thereof shall be liable for failure
to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of
any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The
powers conferred on Agent hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The other Secured
Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of
their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
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ARTICLE VIII
MISCELLANEOUS
Section 8.1 Reinstatement . Each Grantor agrees that, if any payment made by any Credit Party or other Person and applied to the
Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Credit Party, its
estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force
and effect, as fully as if such payment had never been made. If, prior to any of the foregoing, (a) any Lien or other Collateral securing such
Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of the Guaranty hereunder
shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and
such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any
such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.
Section 8.2 Release of Collateral . (a) At the time provided in Section 8.10(b)(iii) of the Credit Agreement, the Collateral shall be released
from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of Agent
and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file UCC amendments at such time evidencing the termination of
the Liens so released. At the request of any Grantor following any such termination, Agent shall promptly deliver to such Grantor any
Collateral of such Grantor held by Agent hereunder and shall promptly execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.
(b) If Agent shall be directed or permitted pursuant to Section 8.10(b) of the Credit Agreement to release any Lien or any Collateral,
such Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions set forth in,
Section 8.10(b) of the Credit Agreement. In connection therewith, Agent, at the request of any Grantor, shall promptly execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to evidence such release.
(c) At the time provided in Section 8.10(b) of the Credit Agreement and at the request of the Borrower Representative, a Grantor
shall be automatically released from its obligations hereunder in the event that all the Stock and Stock Equivalents of such Grantor shall be sold
to any Person that is not an Affiliate of Holdings, a Borrower or the Subsidiaries of a Borrower in a transaction permitted by the Loan
Documents.
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Section 8.3 Independent Obligations . The obligations of each Grantor hereunder are independent of and separate from the Secured
Obligations and the Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is not paid when due, or upon the occurrence
and during the continuance of any Event of Default, Agent may, at its sole election, proceed directly and at once, without notice, against any
Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first
proceeding against any other Grantor, any other Credit Party or any other Collateral and without first joining any other Grantor or any other
Credit Party in any proceeding.
Section 8.4 No Waiver by Course of Conduct . No Secured Party shall by any act (except by a written instrument pursuant to Section 8.5
), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy that such Secured Party would otherwise have on any future occasion.
Section 8.5 Amendments in Writing . None of the terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except in accordance with Section 9.1 of the Credit Agreement; provided , however , that annexes to this Agreement may
be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder
Agreements, in substantially the form of Annex 1 and Annex 2 to this Agreement, respectively, in each case duly executed by Agent and each
Grantor directly affected thereby.
Section 8.6 Additional Grantors; Additional Pledged Collateral . (a) Joinder Agreements . If, at the option of a U.S. Borrower or as
required pursuant to Section 4.13 of the Credit Agreement, a U.S. Borrower shall cause any Subsidiary that is not a Grantor to become a
Grantor hereunder, such Subsidiary shall execute and deliver to Agent a Joinder Agreement substantially in the form of Annex 2 to this
Agreement and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on
the Closing Date.
(b) Pledge Amendments . To the extent any Pledged Collateral has not been delivered as of the Closing Date, such Grantor shall
deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 to this Agreement (each, a “ Pledge Amendment
”). Such Grantor authorizes Agent to attach each Pledge Amendment to this Agreement.
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Section 8.7 Notices . All notices, requests and demands to or upon Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 9.2 of the Credit Agreement; provided , however , that any such notice, request or demand to or upon any Grantor shall
be addressed to the Borrower Representative’s notice address set forth in Section 9.2 of the Credit Agreement.
Section 8.8 Successors and Assigns . This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to
the benefit of each Secured Party and their successors and assigns; provided , however , that no Grantor may assign, transfer or delegate any of
its rights or obligations under this Agreement without the prior written consent of Agent.
Section 8.9 Counterparts . This Agreement may be executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the
same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an
executed signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be as effective as delivery of a
manually executed counterpart hereof.
Section 8.10 Severability . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect
any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any
other jurisdiction.
Section 8.11 Governing Law . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
Section 8.12 Waiver of Jury Trial . THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO,, THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE. EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SECTIONS 9.18(b) and 9.18(c) OF THE CREDIT
AGREEMENT.
Section 8.13 ULC Limitation . Notwithstanding any provisions to the contrary contained in this Agreement, the Credit Agreement or any
other document or agreement among all or some of the parties hereto, each Grantor is as of the date of this Agreement the sole registered and
beneficial owner of all Pledged ULC Shares more particularly described in Schedule 3 to this Agreement and will remain so until such time as
such Pledged ULC Shares are fully and effectively transferred into the name of the Agent or
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any other person on the books and records of such ULC. Nothing in this Agreement, the Credit Agreement or any other document or agreement
delivered among all or some of the parties hereto is intended to or shall constitute the Agent or any person other than a Grantor to be a member
or shareholder of any ULC until such time as written notice is given by Agent or such other person to the applicable Grantor and all further
steps are taken so as to register the Agent or other person as holder of the Pledged ULC Shares. The granting of the pledge and security interest
pursuant to Article III does not make the Agent a successor to any Grantor as a member or shareholder of any ULC, and neither the Agent nor
any of its respective successors or assigns hereunder shall be deemed to become a member or shareholder of any ULC by accepting this
Agreement or exercising any right granted herein unless and until such time, if any, when the Agent or any successor or assign expressly
becomes a registered member or shareholder of any ULC. Each Grantor shall be entitled to receive and retain for its own account any dividends
or other distributions if any, in respect of the Collateral, and shall have the right to vote such Pledged ULC Shares and to control the direction,
management and policies of the ULC issuing such Pledged ULC Shares to the same extent as such Grantor would if such Pledged ULC Shares
were not pledged to the Agent or to any other person pursuant hereto. To the extent any provision hereof would have the effect of constituting
the Agent to be a member or shareholder of any ULC prior to such time, such provision shall be severed herefrom and ineffective with respect
to the relevant Pledged ULC Shares without otherwise invalidating or rendering unenforceable this Agreement or invalidating or rendering
unenforceable such provision insofar as it relates to Collateral other than Pledged ULC Shares. Notwithstanding anything herein to the contrary
(except to the extent, if any, that the Agent or any of its successors or assigns hereafter expressly becomes a registered member or shareholder
of any ULC), neither the Agent nor any of its respective successors or assigns shall be deemed to have assumed or otherwise become liable for
any debts or obligations of any ULC. Except upon the exercise by the Agent or other persons of rights to sell or otherwise dispose of Pledged
ULC Shares or other remedies following the occurrence and during the continuance of an Event of Default, each Grantor shall not cause or
permit, or enable any ULC in which it holds Pledged ULC Shares to cause or permit, the Agent to: (a) be registered as member or shareholder
of such ULC; (b) have any notation entered in its favour in the share register of such ULC; (c) be held out as member or shareholder of such
ULC; (d) receive, directly or indirectly, any dividends, property or other distributions from such ULC by reason of the Agent or other person
holding a security interest in the Pledged ULC Shares; or (e) act as a member or shareholder of such ULC, or exercise any rights of a member
or shareholder of such ULC, including the right to attend a meeting of such ULC or vote the shares of such ULC.
[ Remainder of page intentionally blank; signature pages follow. ]
34
IN WITNESS WHEREOF , each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first
above written.
REAL ALLOY INTERMEDIATE HOLDING, LLC,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Manager
REAL ALLOY HOLDING, INC.,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
ALERIS RECYCLING, INC.,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
Effective upon the change of name from “Aleris
Recycling, Inc.” to “Real Alloy Recycling, Inc.”:
REAL ALLOY RECYCLING, INC.,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
SIGNATURE PAGE
ALERIS RECYCLING BENS RUN, LLC,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
Effective upon the change of name from “Aleris
Recycling Bens Run, LLC.” to “Real Alloy Bens Run,
LLC”:
REAL ALLOY BENS RUN, LLC,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
ALERIS SPECIALTY PRODUCTS, INC.,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
Effective upon the change of name from “Aleris
Specialty Products, Inc.” to “Real Alloy Specialty
Products, Inc.”:
REAL ALLOY SPECIALTY PRODUCTS, INC.,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
SIGNATURE PAGE
ALERIS SPECIFICATION ALLOYS, INC.,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
Effective upon the change of name from “Aleris
Specification Alloys, Inc.” to “Real Alloy Specification,
Inc.”:
REAL ALLOY SPECIFICATION, INC.,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
ETS SCHAEFER, LLC,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
Assistant Secretary
RA MEXICO HOLDING, LLC,
as Grantor
By:
Name:
Title:
/s/ W. Christopher Manderson
W. Christopher Manderson
Secretary
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
SIGNATURE PAGE
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATIO
N,
as Agent
By:
Name:
Title:
/s/ Michael R. Todorow
Michael R. Todorow
Its Duly Authorized
Signatory
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
SIGNATURE PAGE
ANNEX 1
TO
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
FORM OF PLEDGE AMENDMENT
This Pledge Amendment (this “ Pledge Amendment ”), dated as of
, 20 , is delivered pursuant to Section 8.6 of the U.S.
Revolving Guaranty and Security Agreement, dated as of Aleris Recycling, Inc., a Delaware corporation, to be known as Real Alloy Recycling,
Inc., a Delaware corporation, on the Closing Date, the undersigned Grantor and the other Persons from time to time party thereto as Grantors in
favor of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as Agent for the Secured Parties referred
to therein (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “ Guaranty and Security
Agreement ”). Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
The undersigned hereby agrees that this Pledge Amendment may be attached to the Guaranty and Security Agreement and that the
Pledged Collateral listed on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Guaranty and
Security Agreement and shall secure all Secured Obligations of the undersigned.
The undersigned hereby represents and warrants that each of the representations and warranties contained in Sections 4.1 , 4.2 , 4.3 and
4.8 of the Guaranty and Security Agreement is true and correct on and as of the date hereof as if made on and as of such date.
THIS PLEDGE AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Pledge Amendment to be duly executed and delivered as of the date first
above written.
[GRANTOR]
By:
Name:
Title:
To be used for pledge of Additional Pledged Collateral by existing Grantor.
A1-1
Annex 1-A
PLEDGED STOCK
ISSUER
CERTIFICATE
NO(S).
CLASS
PAR VALUE
NUMBER OF
SHARES,
UNITS OR
INTERESTS
FINAL
MATURITY
PRINCIPAL
AMOUNT
PLEDGED DEBT INSTRUMENTS
ISSUER
DESCRIPTION OF
DEBT
CERTIFICATE
NO(S).
ACKNOWLEDGED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION ,
as Agent
By:
Name:
Title: Its Duly Authorized Signatory
ANNEX 2
TO
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT (this “ Joinder Agreement ”), dated as of
, 20 , is delivered pursuant to Section 8.6 of the U.S.
Revolving Guaranty and Security Agreement, dated as of February 27, 2015, by Aleris Recycling, Inc., a Delaware corporation, to be known as
Real Alloy Recycling, Inc., a Delaware corporation, on the Closing Date, the undersigned Grantor and the other Persons from time to time
party thereto as Grantors in favor of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as Agent for
the Secured Parties referred to therein (as such agreement may be amended, restated, supplemented or otherwise modified from time to time,
the “ Guaranty and Security Agreement ”). Capitalized terms used herein without definition are used as defined in the Guaranty and Security
Agreement.
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 8.6 of the Guaranty and Security
Agreement, hereby becomes a party to the Guaranty and Security Agreement as a Grantor thereunder with the same force and effect as if
originally named as a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of the undersigned,
hereby mortgages, pledges and hypothecates to Agent, for the benefit of the Secured Parties, and grants to Agent, for the benefit of the Secured
Parties, a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly
assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the
Guaranty and Security Agreement.
The information set forth in Annex 1-A to this Agreement is hereby added to the information set forth in Schedules 1 , 2 , and 3 to the
Guaranty and Security Agreement and Schedules 3.9 , 3.16 , 3.20 , 3.21 and 3.22 to the Credit Agreement. By acknowledging and agreeing to
this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be attached to the Guaranty and Security Agreement
and that the Pledged Collateral listed on Annex 1-A to this Joinder Amendment shall be and become part of the Collateral referred to in the
Guaranty and Security Agreement and shall secure all Secured Obligations of the undersigned.
The undersigned hereby represents and warrants that each of the representations and warranties contained in Article IV of the Guaranty
and Security Agreement applicable to it is true and correct on and as of the date hereof as if made on and as of such date.
THIS JOINDER AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
A2-1
IN WITNESS WHEREOF, THE UNDERSIGNED HAS CAUSED THIS JOINDER AGREEMENT TO BE DULY EXECUTED AND
DELIVERED AS OF THE DATE FIRST ABOVE WRITTEN.
[ADDITIONAL GRANTOR]
By:
Name:
Title:
A2-2
ACKNOWLEDGED AND AGREED
as of the date first above written:
[EACH GRANTOR PLEDGING ADDITIONAL
COLLATERAL]
By:
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATIO
N,
as Agent
By:
Name:
Title: Its Duly Authorized Signatory
A2-3
ANNEX 3
TO
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of
, 20 , is made by each of the
entities listed on the signature pages hereof (each a “ Grantor ” and, collectively, the “ Grantors ”), in favor of General Electric Capital
Corporation (“ GE Capital ”), as administrative agent (in such capacity, together with its successors and permitted assigns, “ Agent ”) for the
Secured Parties (as defined in the Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, pursuant to the Revolving Credit Agreement, dated as of February 27, 2015 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “ Credit Agreement ”), by and among Aleris Recycling, Inc., a Delaware
corporation, to be known as Real Alloy Recycling, Inc., a Delaware corporation, on the Closing Date, the other Credit Parties, the Lenders and
the L/C Issuers from time to time party thereto and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as Agent,
the Lenders and the L/C Issuers have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the
conditions set forth therein;
WHEREAS, each Grantor has agreed, pursuant to that certain U.S. Revolving Guaranty and Security Agreement dated as of February 27,
2015 in favor of Agent (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “ Guaranty
and Security Agreement ”), to guarantee the Obligations (as defined in the Credit Agreement) of each Borrower; and
WHEREAS, all of the Grantors are party to the Guaranty and Security Agreement pursuant to which the Grantors are required to execute
and deliver this [Copyright] [Patent] [Trademark] Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the L/C Issuers and Agent to enter into the Credit
Agreement and to induce the Lenders and the L/C Issuers to make their respective extensions of credit to the Borrowers thereunder, each
Grantor hereby agrees with Agent as follows:
Section 1. Defined Terms . Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
Section 2. Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral . Each Grantor, as collateral security for the prompt
and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such
Grantor, hereby mortgages, pledges and hypothecates to Agent for the benefit of the Secured Parties, and grants to Agent for the benefit of the
Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the
“ [Copyright] [Patent] [Trademark] Collateral ”):
A3-1
(a) [all of its Copyrights and all IP Licenses providing for the grant by or to such Grantor of any right under any Copyright,
including, without limitation, those referred to on Schedule 1 hereto;
(b) all renewals, reversions and extensions of the foregoing; and
(c) all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the
foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement,
misappropriation, dilution, violation or other impairment thereof.]
or
(a) [all of its Patents and all IP Licenses providing for the grant by or to such Grantor of any right under any Patent, including,
without limitation, those referred to on Schedule 1 hereto;
(b) all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and
(c) all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the
foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement,
misappropriation, dilution, violation or other impairment thereof.]
or
(a) [all of its Trademarks and all IP Licenses providing for the grant by or to such Grantor of any right under any Trademark,
including, without limitation, those referred to on Schedule 1 hereto;
(b) all renewals and extensions of the foregoing;
(c) all goodwill of the business connected with the use of, and symbolized by, each such Trademark; and
(d) all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the
foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement,
misappropriation, dilution, violation or other impairment thereof.]
Section 3. Guaranty and Security Agreement . The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security
Agreement is granted in conjunction with the security interest granted to Agent pursuant to the Guaranty and
A3-2
Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of Agent with respect to the security
interest in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Guaranty and Security
Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
Section 4. Grantor Remains Liable . Each Grantor hereby agrees that, anything herein to the contrary notwithstanding, such Grantor shall
remain solely responsible for the prosecution, defense, enforcement or any other necessary or desirable actions in connection with their
[Copyrights] [Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
Section 5. Counterparts . This [Copyright] [Patent] [Trademark] Security Agreement may be executed in any number of counterparts and
by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single
counterpart.
Section 6. Governing Law . THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[ Remainder of page intentionally blank; signature pages follow. ]
A3-3
IN WITNESS WHEREOF , each Grantor has caused this [Copyright] [Patent] [Trademark] Security Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth above.
[GRANTOR]
as Grantor
By:
Name:
Title:
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION ,
as Agent
By:
Name:
Title: Its Duly Authorized Signatory
[SIGNATURE PAGE TO [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT]
A3-4
ACKNOWLEDGMENT OF GRANTOR
State of
)
) ss.
County of
)
On this
day of
, 20
before me personally appeared
, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of
, who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on behalf of said corporation as authorized by its Board of Directors
and that he acknowledged said instrument to be the free act and deed of said corporation.
Notary Public
SCHEDULE 1
TO
[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT
[Copyright] [Patent] [Trademark] Registrations
1.
REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]
[Include Registration Number and Date]
2.
[COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS
[Include Application Number and Date]
3.
IP LICENSES
[Include complete legal description of agreement (name of agreement, parties and date)]
SCHEDULE 1
TO
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
Commercial Tort Claims
None.
SCHEDULE 2
TO
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
Filings
DEBTOR
FILING OFFIC
E
Real Alloy Intermediate Holding, LLC
DE - SOS
Real Alloy Holding, Inc.
DE - SOS
RA Mexico Holding, LLC
DE - SOS
Aleris Recycling, Inc.
DE - SOS
Aleris Specialty Products, Inc.
DE - SOS
ETS Schaefer, LLC
OH - SOS
Aleris Specification Alloys, Inc.
DE - SOS
Aleris Recycling Bens Run, LLC
DE - SOS
SCHEDULE 3
TO
U.S. REVOLVING GUARANTY AND SECURITY AGREEMENT
Pledged Collateral
Pledged Certificated Stock and Pledged Uncertificated Stock:
Debtor/Grantor
# of
Shares
Owned
Issuer
Total Shares
Outstanding
% of Interest
Pledged
Real Alloy Intermediate Holding,
LLC
Real Alloy Holding, Inc.
1,000
1,000
100%
Real Alloy Intermediate Holding,
LLC
SGH Escrow Corporation
1,000
1,000
100%
Real Alloy Holding, Inc.
Aleris Recycling, Inc.
10
10
100%
Real Alloy Holding, Inc.
Real Alloy Canada Company
100
100
65% to secure the Obligations;
remaining 35% to secure the
Canadian Obligations
Real Alloy Holding, Inc.
Evergreen Holding Germany
GmbH*
100%
interest
N/A
65% to secure the Obligations;
remaining 35% to secure the
Canadian Obligations
Real Alloy Holding, Inc.
Real Alloy UK Holdco Ltd.
1,000
1,000
65% to secure the Obligations;
remaining 35% to secure the
Canadian Obligations
Real Alloy Holding, Inc.
RA Mexico Holding, LLC
100%
interest
N/A
100%
Real Alloy Holding, Inc.
Real Alloy Mexico Holdco S.
de R.L. de C.V.*
99.9999%
interest
N/A
65% to secure the Obligations;
remaining 34.9999% to secure
the Canadian Obligations
Debtor/Grantor
# of
Shares
Owned
Issuer
Total Shares
Outstanding
% of Interest
Pledged
RA Mexico Holding, LLC
Real Alloy Mexico Holdco S. de
R.L. de C.V.*
0.0001%
interest
N/A
0.0001% to secure the Canadian
Obligations
Aleris Recycling, Inc.
Aleris Recycling Bens Run, LLC
100%
interest
N/A
100%
Aleris Recycling, Inc.
Aleris Specialty Products, Inc.
10
10
100%
Aleris Recycling, Inc.
Aleris Specification Alloys, Inc.
10
10
100%
Aleris Recycling, Inc.
ETS Schaefer, LLC
100%
interest
N/A
100%
* Pledged Uncertificated Stock
Pledged Debt Instruments:
Master Intercompany Subordinated Note among the Credit Parties and their Subsidiaries, dated as of February 27, 2015
The following promissory notes, each dated as of February 27, 2015:
(a)
Real Alloy UK Holdco Ltd. (Maker) on behalf of Real Alloy Holding, Inc. (Holder)
(b)
Real Alloy Norway Holding AS (Maker) on behalf of Real Alloy Holding, Inc. (Holder)
(c)
Realallholding S.A. de C.V. SOFOM ENR (Maker) on behalf of Real Alloy Holding, Inc. (Holder)
(d)
Real Alloy Canada Company (Maker) on behalf of Real Alloy Holding, Inc. (Holder)
(e)
Evergreen Holding Germany GmbH (Maker) on behalf of Real Alloy Holding, Inc. (Holder)
Exhibit 10.4
EXECUTION COPY
CANADIAN REVOLVING GUARANTEE AND SECURITY AGREEMENT
Dated as of February 27, 2015
by
ALERIS SPECIFICATION ALLOY PRODUCTS CANADA COMPANY,
as a Canadian Borrower,
and
EACH OTHER GRANTOR
FROM TIME TO TIME PARTY HERETO
in favour of
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS
Section 1.1
Definitions
Section 1.2
Certain Other Terms
2
2
6
ARTICLE II GUARANTEE
Section 2.1
Guarantee
Section 2.2
Contribution
Section 2.3
Authorization; Other Agreements
Section 2.4
Guarantee Absolute and Unconditional
Section 2.5
Waivers
Section 2.6
Reliance
7
7
7
7
8
10
10
ARTICLE III GRANT OF SECURITY INTEREST
Section 3.1
Collateral
Section 3.2
Grant of Security Interest in Collateral
Section 3.3
Exception to Last Day
Section 3.4
Attachment
11
11
11
12
12
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.1
Title; No Other Liens
Section 4.2
Perfection and Priority
Section 4.3
Jurisdiction of Organization; Chief Executive Office
Section 4.4
Locations of Inventory, Equipment and Books and Records
Section 4.5
Pledged Collateral
Section 4.6
Instruments and Chattel Paper Formerly Accounts
Section 4.7
Intellectual Property
Section 4.8
Specific Collateral
Section 4.9
Enforcement
Section 4.10
Representations and Warranties of the Credit Agreement
12
12
12
13
13
13
14
14
14
14
14
ARTICLE V COVENANTS
Section 5.1
Maintenance of Perfected Security Interest; Further Documentation and Consents
Section 5.2
Changes in Locations, Name, Etc.
Section 5.3
Pledged Collateral
Section 5.4
Accounts
Section 5.5
Futures Accounts
Section 5.6
Delivery of Instruments and Chattel Paper and Control of Investment Property, Letter-of-Credit Rights
Section 5.7
Intellectual Property
Section 5.8
Notices
Section 5.9
Controlled Securities Account
15
15
16
16
17
18
18
18
20
20
TABLE OF CONTENTS
(continued)
Page
ARTICLE VI REMEDIAL PROVISIONS
Section 6.1
PPSA and Other Remedies
Section 6.2
Accounts and Payments in Respect of Intangibles
Section 6.3
Pledged Collateral
Section 6.4
Proceeds to be Turned over to and Held by Agent
Section 6.5
Sale of Pledged Collateral
Section 6.6
Deficiency
20
20
24
25
26
26
27
ARTICLE VII AGENT
Section 7.1
Agent’s Appointment as Attorney-in-Fact
Section 7.2
Authorization to File Financing Statements
Section 7.3
Authority of Agent
Section 7.4
Duty; Obligations and Liabilities
27
27
29
29
29
ARTICLE VIII MISCELLANEOUS
Section 8.1
Reinstatement
Section 8.2
Release of Collateral
Section 8.3
Independent Obligations
Section 8.4
No Waiver by Course of Conduct
Section 8.5
Amendments in Writing
Section 8.6
Additional Grantors; Additional Pledged Collateral
Section 8.7
[Intentionally Deleted]
Section 8.8
Notices
Section 8.9
Successors and Assigns
Section 8.10
Counterparts
Section 8.11
Severability
Section 8.12
Governing Law
Section 8.13
Waiver of Jury Trial
Section 8.14
Permitted Liens
Section 8.15
ULC Limitation
Section 8.16
Amalgamation
30
30
31
31
31
32
32
32
32
32
32
33
33
33
33
33
34
ANNEXES AND SCHEDULES
Annex 1
Annex 2
Annex 3
Form of Pledge Amendment
Form of Joinder Agreement
Form of Intellectual Property Security Agreement
Schedule 1
Schedule 2
Schedule 3
Schedule 4
Filings
Jurisdiction of Organization; Chief Executive Office
Location of Inventory and Equipment
Pledged Collateral
This CANADIAN REVOLVING GUARANTEE AND SECURITY AGREEMENT (including all exhibits, annexes and schedules
hereto, as the same may be amended, modified and/or restated from time to time, this “ Agreement ”), dated as of February 27, 2015, by
ALERIS SPECIFICATION ALLOY PRODUCTS CANADA COMPANY (the “ Canadian Borrower ”) and each of the other entities listed on
the signature pages hereof or that becomes a party hereto pursuant to Section 8.6 (together with the Canadian Borrower, the “ Grantors ” and
each, a “ Grantor ”), in favour of General Electric Capital Corporation (“ GE Capital ”), in its capacity as administrative agent (in such
capacity, together with its successors and permitted assigns, “Agent”) for the Lenders, the L/C Issuers and each other Secured Party (each as
defined in the Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, pursuant to the Revolving Credit Agreement dated as of the date hereof (as the same may be amended, refinanced, replaced,
restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”) by and among the U.S. Borrowers, the Canadian
Borrower, the other Credit Parties from time to time party thereto, the Lenders, the L/C Issuers from time to time party thereto and GE Capital,
as Agent, the Lenders and the L/C Issuers have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the
conditions set forth therein;
WHEREAS, each Grantor (other than the Canadian Borrower) has agreed to guarantee the Canadian Obligations (as defined in the Credit
Agreement);
WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders and the L/C Issuers to make their respective extensions of credit
to the Canadian Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to Agent.
NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the L/C Issuers and Agent to enter into the Credit
Agreement and to induce the Lenders and the L/C Issuers to make their respective extensions of credit to the Canadian Borrower thereunder,
each Grantor hereby agrees with Agent as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions
(a) Capitalized terms used herein without definition are used as defined in the Credit Agreement.
(b) The following terms have the meanings given to them in the PPSA and terms used herein without definition that are
defined in the PPSA have the meanings given to them in the PPSA (such meanings to be equally applicable to both the singular and plural
forms of the terms defined): “ certificated security ”, “ chattel paper ”, “ document of title ”, “ equipment ”, “ futures account ”, “ futures
contract ”, “ goods ”, “ instrument ”, “ intangible ”, “ investment property ”, “ money ”, “ motor vehicle ”, “ proceeds ”, “ securities account ”
and “ security ”.
(c) The following terms shall have the following meanings:
“ Acquisition Agreement ” shall mean the Purchase and Sale Agreement, dated as of October 17, 2014, by and among Aleris
Corporation, a Delaware corporation, Aleris International, Inc., a Delaware corporation, Aleris Holding Canada Limited, a New Brunswick
corporation, Aleris Aluminum Netherlands B.V., a limited liability company organized under the laws of the Netherlands, Aleris Deutschland
Holding GmbH, a limited liability company organized under the laws of Germany, Dutch Aluminum C.V., a limited partnership organized
under the laws of the Netherlands, and Aleris Deutschland Vier GmbH Co KG, a limited partnership organized under the laws of Germany,
SGH Acquisition Holdco, Inc., a Delaware corporation, Evergreen Holding Germany GmbH, a limited liability company organized under the
laws of Germany and Signature Group Holdings, Inc., a Delaware corporation.
“ Agent ” has the meaning given such term in the preamble to this Agreement.
“ Agreement ” has the meaning given such term in the preamble to this Agreement.
“ Applicable IP Office ” means the Canadian Intellectual Property Office, the Canadian Industrial Design Office or any
similar office or agency within or outside Canada.
“ Canadian Borrower ” has the meaning given such term in the preamble to this Agreement.
“ Cash Collateral Account ” means a deposit account or securities account subject, in each instance, to a Control Agreement,
other than accounts established to cash collateralize L/C Reimbursement Obligations.
“ Collateral ” has the meaning specified in Section 3.1.
“ Controlled Securities Account ” means each securities account (including all financial assets held therein and all
certificates and instruments, if any, representing or evidencing such financial assets) that is the subject of an effective Control Agreement.
“ Deposit Account ” means a demand, savings, passbook, or similar account maintained with a bank or other deposit taking
institution.
“ Design ” means all of the following now owned or hereafter acquired by a Grantor: (a) all industrial designs and
intangibles of like nature (whether registered or unregistered), now owned or existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the Canadian
Intellectual Property Office or in any similar office or agency in any other country or any political subdivision thereof, and (b) all reissues,
extensions or renewals thereof.
“ Excluded Property ” means, collectively, (i) any permit or license or any Contractual Obligation entered into by any
Grantor (A) that prohibits or requires the consent of any Person other than a Grantor or its Affiliates which has not been obtained as a condition
to the creation by such Grantor of a Lien on any right, title or interest in such permit, license or Contractual Obligation or any Stock or Stock
Equivalent related thereto or (B) to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon, but only,
with respect to the prohibition in (A) and (B), to the extent, and for as long as, such prohibition is not terminated or rendered unenforceable or
otherwise deemed ineffective by the PPSA or any other Requirement of Law, (ii) Property owned by any Grantor that is subject to a purchase
money Lien or a Capital Lease permitted under the Credit Agreement if the Contractual Obligation pursuant to which such Lien is granted (or
in the document providing for such Capital Lease) prohibits or requires the consent of any Person other than a Grantor or its Affiliates which
has not been obtained as a condition to the creation of any other Lien on such Property, (iii) any “intent to use” Trademark applications for
which a statement of use has not been filed (but only until such statement is filed), (iv) assets and properties of the Excluded Subsidiary and
(v) the thirty percent (30%) partnership interest in the Excluded Subsidiary that is owned by Magna Aluminum, Inc., a California corporation;
provided , however , “ Excluded Property ” shall not include any proceeds, products, substitutions or replacements of Excluded Property
(unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Property).
“ Excluded Subsidiary ” means IMSAMET of Arizona, an Arizona general partnership, 70% of whose partnership interests
are owned by Aleris Recycling, Inc., a Delaware corporation, and 30% of whose partnership interests are owned by Magna Aluminum, Inc., a
California corporation.
“ GE Capital ” has the meaning given such term in the preamble to this Agreement.
“ Grantors ” has the meaning given such term in the preamble to this Agreement.
“ Guarantee ” means the guarantee of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement.
“ Guaranteed Obligations ” has the meaning set forth in Section 2.1.
“ Guarantor ” means each Grantor other than the Canadian Borrower.
“ Insurance ” shall mean (i) all insurance policies covering any or all of the Collateral (regardless of whether or not Agent is
the loss payee thereof) and (ii) any key man life insurance policies.
“ Internet Domain Name ” means all right, title and interest (and all related IP Ancillary Rights) arising under any
Requirement of Law in or relating to Internet domain names.
“ Material Intellectual Property ” means Intellectual Property that is owned by or licensed to a Grantor and material to the
conduct of any Grantor’s business.
“ Pledged Certificated Stock ” means all certificated securities and any other Stock or Stock Equivalent of any Person
evidenced by a certificate, instrument or other similar document, in each case owned by any Grantor, and any distribution of property made on,
in respect of or in exchange for the foregoing from time to time, including all Stock and Stock Equivalents listed on Schedule 4 to this
Agreement. Pledged Certificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities
Accounts to the extent permitted by Section 5.9 hereof.
“ Pledged Collateral ” means, collectively, the Pledged Stock and the Pledged Debt Instruments.
“ Pledged Debt Instruments ” means all right, title and interest of any Grantor in instruments evidencing any Indebtedness
owed to such Grantor or other obligations owed to such Grantor, and any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, including all Indebtedness described on Schedule 4 to this Agreement, issued by the obligors named therein.
Pledged Debt Instruments excludes any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by
Section 5.9 hereof.
“ Pledged Investment Property ” means any investment property of any Grantor, and any distribution of property made on, in
respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments. Pledged Investment
Property excludes any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by Section 5.9 hereof.
“ Pledged Stock ” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
“ Pledged ULC Shares ” shall mean the Pledged Stock which are shares in the capital stock of a ULC.
“ Pledged Uncertificated Stock ” means any Stock or Stock Equivalent of any Person that is not Pledged Certificated Stock,
including all right, title and interest of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock
or as a member of any limited liability company, all right, title and interest of any Grantor in, to and under any Organization Document of any
partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the
foregoing from time to time, including in each case those interests set forth on Schedule 4 to this Agreement, to the extent such interests are not
certificated. Pledged Uncertificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities
Accounts to the extent permitted by Section 5.9 hereof.
“ PPSA ” means the Personal Property Security Act (Ontario); provided, that if the attachment, perfection or priority of the
secured party’s security interests in any Collateral are governed by the personal property security laws of any jurisdiction other than Ontario,
PPSA shall mean those personal property laws in such other jurisdiction in Canada for the purpose of the provisions hereof relating to such
attachment, perfection or priority and for the definitions related to such provisions.
“ Secured Obligations ” has the meaning given such term in Section 3.2 hereof.
“ Securities Laws ” means applicable federal, provincial, state, territorial or foreign securities laws and regulations.
“ Software ” means (a) all computer programs, including source code and object code versions, (b) all data, databases and
compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of
the foregoing.
“ Specified Assigned Agreement ” shall mean the Acquisition Agreement, as such agreement may be amended,
supplemented or otherwise modified from time to time.
“ ULC ” shall mean any unlimited company, unlimited liability company or unlimited liability corporation or any similar
entity existing under the laws of any province or territory of Canada and any successor to any such entity.
Section 1.2 Certain Other Terms .
(a) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such
terms. The terms “herein”, “hereof” and similar terms refer to this Agreement as a whole and not to any particular Article, Section or clause in
this Agreement. References herein to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article,
Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall
refer to such Grantor’s Collateral or any relevant part thereof.
(b) Other Interpretive Provisions .
(i) Defined Terms . Unless otherwise specified herein or therein, all terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or delivered pursuant hereto.
(ii) The Agreement . The words “hereof”, “herein”, “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.
(iii) Certain Common Terms . The term “including” is not limiting and means “including without limitation.”
(iv) Performance; Time . Whenever any performance obligation hereunder (other than a payment obligation) shall be
stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied
on the next succeeding Business Day. In the computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word
“through” means “to and including.” If any provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be interpreted to encompass any and all means,
direct or indirect, of taking, or not taking, such action.
(v) Contracts . Unless otherwise expressly provided herein, references to agreements and other contractual instruments,
including this Agreement and the other Loan Documents, shall be deemed to include all subsequent amendments, thereto,
restatements and substitutions thereof and other modifications and supplements thereto which are in effect from time to time,
but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document.
(vi) Laws . References to any statute or regulation are to be construed as including all statutory and regulatory
provisions related thereto or consolidating, amending, replacing, supplementing or interpreting the statute or regulation.
ARTICLE II
GUARANTEE
Section 2.1 Guarantee . To induce the Lenders to make the Loans, the L/C Issuers to Issue Letters of Credit and each other Secured
Party to make credit available to or for the benefit of the Canadian Borrower, each Guarantor hereby, jointly and severally, absolutely,
unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at
stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the
Canadian Obligations whether existing on the date hereof or hereinafter incurred or created (the “ Guaranteed Obligations ”). This Guarantee
by each Guarantor hereunder constitutes a guarantee of payment and not of collection.
Section 2.2 Contribution . To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed
Obligation exceeding the greater of (a) the amount of the economic benefits actually received by such Guarantor and its Subsidiaries from the
Loans, Letter of Credit Obligations for all Canadian Letters of Credit and other Canadian Obligations and (b) the amount such Guarantor would
otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by
the Canadian Borrower and Holdings) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears
to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount
of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.
Section 2.3 Authorization; Other Agreements . The Secured Parties are hereby authorized, without notice to or demand upon any
Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability
hereunder, from time to time, to do each of the following:
(a) (i) subject to compliance, if applicable, with Section 9.1 of the Credit Agreement, modify, amend, supplement or
otherwise change, (ii) accelerate or otherwise change the time of payment or (iii) waive or otherwise consent to noncompliance with, any
Guaranteed Obligation or any Loan Document;
(b) apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in
such order as provided in the Loan Documents;
(c) refund at any time any payment received by any Secured Party in respect of any Guaranteed Obligation;
(d) (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept,
substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guarantee
therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any
one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner
with the Canadian Borrower or any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and
(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.
The Guarantors agree that the Secured Parties may take any action or refrain from taking any action specified in the U.S. Revolving
Guaranty and Security Agreement (including without limitation Section 2.4 thereof) without discharging or otherwise affecting the obligations
of any Guarantor hereunder.
Section 2.4 Guarantee Absolute and Unconditional . Each Guarantor hereby waives and agrees not to assert any defence, whether
arising in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Guarantee are
irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not
be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guarantee, in each case except as otherwise
agreed in writing by Agent):
(a) the invalidity or unenforceability of any obligation of the Canadian Borrower or any other Guarantor under any Loan
Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or
other guarantee of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any
security for the Guaranteed Obligations or any part thereof;
(b) the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from the Canadian Borrower or
any other Guarantor or other action to enforce the same or (ii) any action to enforce any Loan Document or any Lien thereunder;
(c) the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to,
any Collateral;
(d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against
the Canadian Borrower, any other Guarantor or any of the Canadian Borrower’s other Subsidiaries or any procedure, agreement, order,
stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any
Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;
(e) any foreclosure, whether or not through judicial sale, and any other sale or other disposition of any Collateral or any
election following the occurrence of an Event of Default by any Secured Party to proceed separately against any Collateral in accordance with
such Secured Party’s rights under any applicable Requirement of Law;
(f) the failure of Agent or any other Secured Party to assert any claim or demand or to exercise or enforce any right or
remedy under the provisions of any Loan Document or otherwise;
(g) any other defence, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable
discharge of the Canadian Borrower, any other Guarantor or any of the Canadian Borrower’s other Subsidiaries, in each case other than the
payment in full of the Guaranteed Obligations; or
(h) any of the items specified in Section 2.5 of the U.S. Revolving Guaranty and Security Agreement.
Section 2.5 Waivers . Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defence,
setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the
following: (a) any demand for payment or performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment,
demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but
unpaid interest thereon) becoming immediately due and payable; and (d) any other notice in respect of any Guaranteed Obligation or any part
thereof, and any defence arising by reason of any disability or other defence of the Canadian Borrower or any other Guarantor. Each Guarantor
further unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement
or contribution or similar right against the Canadian Borrower or any other Guarantor by reason of any Loan Document or any payment made
thereunder or (y) assert any claim, defence, setoff or counterclaim it may have against any other Credit Party or set off any of its obligations to
such other Credit Party against obligations of such Credit Party to such Guarantor. No obligation of any Guarantor hereunder shall be
discharged other than by complete performance. Each Guarantor further waives any right such Guarantor may have under any applicable
Requirement of Law to require any Secured Party to seek recourse first against the Canadian Borrower or any other Person, or to realize upon
any Collateral for any of the Canadian Obligations, as a condition precedent to enforcing such Guarantor’s liability and obligations under this
Guarantee.
Section 2.6 Reliance . Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the
Canadian Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of
all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would
reveal, and each Guarantor hereby agrees that no Secured Party shall have any duty to advise any Guarantor of information known to it
regarding such condition or any such circumstances. In the event any Secured Party, in its sole discretion, undertakes at any time or from time
to time to provide any such information to any Guarantor, such Secured Party shall be under no obligation to (a) undertake any investigation
not a part of its regular business routine, (b) disclose any information that such Secured Party, pursuant to accepted or reasonable commercial
finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to
any Guarantor.
ARTICLE III
GRANT OF SECURITY INTEREST
Section 3.1 Collateral . For the purposes of this Agreement, all of the Grantors’ property, rights and assets of every nature and kind,
now owned or subsequently acquired, by way of amalgamation or otherwise, and at any time and from time to time existing or in which each
such Grantor has or acquires any right, interest or title, including without limitation, all of the following collectively referred to as the “
Collateral ”:
(a) all Accounts, chattel paper, Deposit Accounts, documents of title, equipment, intangibles, instruments, Insurance,
Inventory, investment property, letter of credit rights, money and any supporting obligations related to any of the foregoing;
(b) all books and records pertaining to the other property described in this Section 3.1;
(c) Specified Assigned Agreement;
(d) all property of such Grantor held by any Secured Party, including all present and after acquired personal property of
every description, in the custody of or in transit to such Secured Party for any purpose, including safekeeping, collection or pledge, for the
account of such Grantor or as to which such Grantor may have any right or power, including but not limited to cash;
(e) all other goods (including but not limited to fixtures) and personal property of such Grantor, whether tangible or
intangible and wherever located; and
(f) to the extent not otherwise included, all increases, additions and accessions to any of the above, all substitutions or any
replacements and all proceeds, products, accessions, rents and profits of or in respect of any of the foregoing.
Section 3.2 Grant of Security Interest in Collateral . Each Grantor, as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise) of the Canadian Obligations of such Grantor (the “ Secured
Obligations ”), hereby mortgages, pledges and hypothecates to Agent, for the benefit of the Secured Parties, and grants to Agent, for the benefit
of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor;
provided , however , notwithstanding the foregoing, no Lien or security interest is hereby granted on any Excluded Property; provided , further
, that if and when any property shall cease to be Excluded Property, a Lien on and security in such property shall be deemed granted therein.
Each Grantor hereby represents and warrants that the Excluded Property, when taken as a whole, is not material to the business operations or
financial condition of the Grantors, taken as a whole.
Section 3.3 Exception to Last Day
The security interest granted hereby shall not extend or apply to, and Collateral shall not include, the last day of the term of any lease or
agreement therefore, but upon enforcement of the security interest, each Grantor shall stand possessed of such last day in trust or assign the
same to any person acquiring such term.
Section 3.4 Attachment
Each Grantor acknowledges that (i) value has been given, (ii) it has rights in the Collateral, (iii) it has not agreed to postpone the time for
attachment of the Lien granted hereunder, and (iv) it has received a copy of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the L/C Issuers and Agent to enter into the Loan Documents, each Grantor hereby represents and warrants each of
the following to Agent, the Lenders, the L/C Issuers and the other Secured Parties:
Section 4.1 Title; No Other Liens . Except for the Lien granted to Agent pursuant to this Agreement and other Permitted Liens
under any Loan Document (including Section 4.2), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims
of others. Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificated
securities and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of
any other Lien.
Section 4.2 Perfection and Priority . The security interest granted pursuant to this Agreement constitutes a valid and continuing
perfected security interest in favour of Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (a) in the
case of all Collateral in which a security interest may be perfected by filing a financing statement under the PPSA, the completion of the filings
and other actions specified on Schedule 1 to this Agreement (which, in the case of all filings and other documents referred to on such schedule,
have been delivered to Agent in completed and duly authorized form), (b) with respect to any securities account or futures account other than
Excluded Accounts, the filing of a financing statement under the PPSA or the execution of Control Agreements in the case of securities and
futures accounts to which the PPSA applies and (c) in the case of all Copyrights, Trademarks, Designs and Patents for which PPSA filings are
insufficient, all appropriate filings having been made with the Applicable IP Office. Such security interest shall be prior to all other Liens on
the Collateral except for Permitted Liens having priority over Agent’s Lien by operation of law or permitted pursuant to Section 5.1(e) , 5.1(g) ,
5.1(h) , 5.1(i) or 5.1(k) of the Credit Agreement upon (i) in the case of all Pledged Certificated Stock, Pledged Debt
Instruments and Pledged Investment Property, the delivery thereof to Agent of such Pledged Certificated Stock, Pledged Debt Instruments and
Pledged Investment Property consisting of instruments and certificates, in each case properly endorsed for transfer to Agent or in blank, (ii) in
the case of all Pledged Investment Property not in certificated form to which the PPSA applies, the execution of Control Agreements, (iii) in
the case of all other instruments and chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments or Pledged Investment
Property, the delivery to Agent of such instruments and chattel paper, and (iv) with respect to motor vehicles (in the case of Ontario) and serial
numbered goods (in the case of provinces and territories where serial numbered goods are applicable), the filing of a financing statement
containing the information required under Section 5.1(e). Except as set forth in this Section 4.2, all actions by each Grantor necessary or
desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.
Section 4.3 Jurisdiction of Organization; Chief Executive Office
Such Grantor’s jurisdiction of organization, legal name and organizational identification number, if any, and the location of such
Grantor’s chief executive office, registered office or sole place of business, in each case as of the date hereof, is specified on Schedule 2 to this
Agreement and such Schedule 2 also lists all jurisdictions of incorporation, legal names and locations of such Grantor’s chief executive office,
registered office or sole place of business for the five years preceding the date hereof.
Section 4.4 Locations of Inventory, Equipment and Books and Records
On the date hereof, such Grantor’s inventory and equipment (other than inventory or equipment in transit) and books and records
concerning the Collateral are kept at the locations listed on Schedule 3 to this Agreement.
Section 4.5 Pledged Collateral
(a) The Pledged Stock pledged by such Grantor hereunder (i) is listed on Schedule 4 to this Agreement and constitutes that
percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on such Schedule 4 , (ii) has been duly
authorized, validly issued and is fully paid and nonassessable (other than Pledged Stock in limited liability companies and partnerships) and
(iii) constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms.
(b) As of the Closing Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment
Property consisting of instruments and certificates has been delivered to Agent in accordance with Section 5.3(a).
(c) Subject to Section 8.14, upon the occurrence and during the continuance of an Event of Default, Agent shall be entitled to
exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or
assignee of such Pledged Stock shall become a holder of such Pledged Stock to the same extent as such Grantor and be entitled to participate in
the management of the issuer of such Pledged Stock and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by
operation of law, cease to be a holder of such Pledged Stock.
Section 4.6 Instruments and Chattel Paper Formerly Accounts . No amount payable to such Grantor under or in connection with any
account is evidenced by any instrument or chattel paper that has not been delivered to Agent, properly endorsed for transfer, to the extent
delivery is required by Section 5.6(a).
Section 4.7 Intellectual Property .
On the Closing Date, all Material Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and
enforceable, and no Material Intellectual Property has been abandoned. No breach or default of any material IP License shall be caused by any
of the following, and none of the following shall limit or impair the ownership, use, validity or enforceability of, or any rights of such Grantor
in, any Material Intellectual Property: (i) the consummation of the transactions contemplated by any Loan Document or (ii) any holding,
decision, judgment or order rendered by any Governmental Authority prior to the date hereof. There are no pending (or, to the knowledge of
such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use,
validity, enforceability of, or such Grantor’s rights in, any Material Intellectual Property of such Grantor. To such Grantor’s knowledge, no
Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any Intellectual Property of such Grantor. Such
Grantor, and to such Grantor’s knowledge each other party thereto, is not in material breach or default of any material IP License.
Section 4.8 Specific Collateral . None of the Collateral is or is proceeds or products of farm products, as-extracted collateral,
health-care-insurance receivables or timber to be cut.
Section 4.9 Enforcement . No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from
any Person is required for the exercise by Agent of its rights (including voting rights) provided for in this Agreement or the enforcement of
remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as may be required in
connection with the disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any
approvals that may be required to be obtained from any bailees or landlords to collect the Collateral.
Section 4.10 Representations and Warranties of the Credit Agreement . The representations and warranties as to such Grantor and
its Subsidiaries made in Article III (Representations and Warranties) of the Credit Agreement are true and correct on each date as required by
Section 2.2 of the Credit Agreement.
ARTICLE V
COVENANTS
Each Grantor agrees with Agent to the following, as long as any Canadian Obligation or Commitment remains outstanding (other than
contingent indemnification Canadian Obligations to the extent no claim giving rise thereto has been asserted):
Section 5.1 Maintenance of Perfected Security Interest; Further Documentation and Consents
(a) Generally . Such Grantor shall (i) not use or permit any Collateral to be used unlawfully or in violation of any provision
of any Loan Document, any Related Agreement, any Requirement of Law or any policy of insurance covering the Collateral and (ii) not enter
into any Contractual Obligation or undertaking restricting the right or ability of such Grantor or Agent to sell, assign, convey or transfer any
Collateral if such restriction would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
(b) Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least
the priority described in Section 4.2 and shall defend such security interest and such priority against the claims and demands of all Persons.
(c) Such Grantor shall furnish to Agent from time to time statements and schedules further identifying and describing the
Collateral and such other documents in connection with the Collateral, in each case as Agent may reasonably request, all in reasonable detail
and in form and substance satisfactory to Agent.
(d) At any time and from time to time, upon the written request of Agent, such Grantor shall, for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers herein granted, (i) take all actions reasonably necessary to perfect or
protect any security interest intended to be created by this Agreement, (ii) promptly and duly execute and deliver, and have recorded, such
further documents, including an authorization to file (or, as applicable, the filing of) any financing statement or financing change statement
under the PPSA (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest created
hereby and (iii) take such further action as Agent may reasonably request, including (A) using commercially reasonable efforts to secure all
approvals necessary or appropriate for the assignment to or for the benefit of Agent of any Contractual Obligation, including any IP License,
held by such Grantor and to enforce the security interests granted hereunder and (B) executing and delivering any Control Agreements with
respect to deposit accounts, securities, futures or similar accounts.
(e) If reasonably requested by Agent, during the continuance of an Event of Default, the Grantor shall provide a list of all
serial numbers of all serial numbered goods and all vehicle identification numbers of all motor vehicles.
(f) To ensure that a Lien and security interest is granted on any of the Excluded Property set forth in clause (ii) of the
definition of “ Excluded Property ”, such Grantor shall use commercially reasonable efforts to obtain any required consents from any Person
other than the Canadian Borrower and its Affiliates with respect to any permit or license or any Contractual Obligation with such Person
entered into by such Grantor that requires such consent as a condition to the creation by such Grantor of a Lien on any right, title or interest in
such permit, license or Contractual Obligation or any Stock or Stock Equivalent related thereto.
Section 5.2 Changes in Locations, Name, Etc.
Except upon 30 days’ prior written notice to Agent and delivery to Agent of (a) all documents reasonably requested by Agent to maintain
the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 3 to this
Agreement showing any additional locations at which inventory or equipment shall be kept, such Grantor shall not do any of the following:
(i) permit any inventory or equipment to be kept at a location other than those listed on Schedule 3 to this Agreement,
except for inventory or equipment in transit;
(ii) change its jurisdiction of organization or its location or chief executive office or registered office, in each case from
that referred to in Section 4.3; or
(iii) except as set forth on Schedule 5.14 of the Credit Agreement, change its legal name or organizational
identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such
an extent that any financing statement filed in connection with this Agreement would become misleading.
Section 5.3 Pledged Collateral
(a) Delivery of Pledged Collateral . Such Grantor shall (i) deliver to Agent, in suitable form for transfer and in form and
substance satisfactory to Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments
evidencing Pledged Investment Property and (ii) maintain all other Pledged Investment Property in a Controlled Securities Account or take
such other measures as Agent may reasonably request in connection with the perfection of the security interest created therein under this
Agreement.
(b) Event of Default . During the continuance of an Event of Default, Agent shall have the right, at any time in its discretion
and without notice to the Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any
Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged
Investment Property for certificates or instruments of smaller or larger denominations.
(c) Cash Distributions with respect to Pledged Collateral . Except as provided in Article VI and subject to the limitations set
forth in the Credit Agreement, such Grantor shall be entitled to receive all cash distributions paid in respect of the Pledged Collateral.
(d) Voting Rights . Except as provided in Article VI , such Grantor shall be entitled to exercise all voting, consent and
corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided , however , that no vote
shall be cast, consent given or right exercised or other action taken by such Grantor that would impair the Collateral or be inconsistent with or
result in any violation of any provision of any Loan Document.
(e) Foreign Pledge Stock . If any issuer of any Pledged Stock is organized under a jurisdiction outside of Canada, each
Grantor shall take such additional actions, including, without limitation, causing the issuer to register the pledge on its books and records or
making such filings or recordings, in each case as may be reasonably necessary or advisable, under the laws of such issuer’s jurisdiction to
ensure the validity, perfection and priority of the security interest of Agent in such Pledged Stock.
(f) Pledged Stock . With respect to any Pledged Stock constituting partnership interests or limited liability company interests
included in the Collateral, if the Grantors collectively own less than 100% of the equity interests in any issuer of such Pledged Stock, Grantors
shall use their commercially reasonable efforts to obtain the consent of each other holder of partnership interest or limited liability company
interests in such issuer to the security interest of Agent hereunder and following an Event of Default, the transfer of such Pledged Stock to
Agent or its designee, and to the substitution of Agent or its designee as a partner or member with all the rights and powers related thereto.
Each Grantor consents to the grant by each other Grantor of a Lien in all Collateral to Agent and without limiting the generality of the
foregoing consents to the transfer of any Pledged Stock to Agent or its designee following and during the continuance of an Event of Default
and to the substitution of Agent or its designee as a partner in any partnership or as a member in any limited liability company with all the
rights and powers related thereto.
Section 5.4 Accounts
(a) Such Grantor shall not, other than in the Ordinary Course of Business, (i) grant any extension of the time of payment of
any account, (ii) compromise
or settle any account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any account,
(iv) allow any credit or discount on any account or (v) amend, supplement or modify any account in any manner that could adversely affect the
value thereof.
(b) So long as an Event of Default is continuing Agent shall have the right to make test verifications of the Accounts in any
manner and through any medium that it reasonably considers advisable, and such Grantor shall furnish all such assistance and information as
Agent may reasonably require in connection therewith. At any time and from time to time, upon Agent’s reasonable request during an Event of
Default, such Grantor shall cause independent public accountants or others satisfactory to Agent to furnish to Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the Accounts.
Section 5.5 Futures Accounts . Such Grantor shall not have any futures account unless subject to a Control Agreement.
Section 5.6 Delivery of Instruments and Chattel Paper and Control of Investment Property, Letter-of-Credit Rights
(a) If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced
by an instrument or chattel paper other than such instrument delivered in accordance with Section 5.3(a) and in the possession of Agent, such
Grantor shall mark all such instruments and chattel paper with the following legend: “This writing and the obligations evidenced or secured
hereby are subject to the security interest of General Electric Capital Corporation, as Agent” and, at the request of Agent, shall immediately
deliver such instrument or chattel paper to Agent, duly endorsed in a manner satisfactory to Agent.
(b) Such Grantor shall not grant “control” (within the meaning of such term under the PPSA) over any investment property
of such Grantor to any Person other than Agent.
(c) If such Grantor is or becomes the beneficiary of a letter of credit that is not a supporting obligation of any Collateral,
such Grantor shall promptly, and in any event within 2 Business Days after becoming a beneficiary, notify Agent thereof and enter into a
Contractual Obligation with Agent, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under
such letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights to Agent. Such Contractual Obligation shall also direct
all payments thereunder to a Cash Collateral Account. The provisions of the Contractual Obligation shall be in form and substance reasonably
satisfactory to Agent.
Section 5.7 Intellectual Property
(a) Within 30 days after any change to Schedule 3.16 to the Credit Agreement for such Grantor, such Grantor shall provide
Agent notification thereof and the short-form intellectual property agreements and assignments as described in this Section 5.7 and any other
documents that Agent reasonably requests with respect thereto.
(b) Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each Trademark included in the Material
Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark
is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services
offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other
notices and legends required by applicable Requirements of Law, (4) not adopt or use any other Trademark that is confusingly similar or a
colorable imitation of such Trademark unless Agent shall obtain a perfected security interest in such other Trademark pursuant to this
Agreement and (ii) not do any act or omit to do any act whereby (w) such Trademark (or any goodwill associated therewith) may become
destroyed, invalidated, impaired or harmed in any way, (x) any Design or Patent included in the Material Intellectual Property may become
forfeited, misused, unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights included in the Material Intellectual
Property may become invalidated, otherwise impaired or fall into the public domain or (z) any Trade Secret that is Material Intellectual
Property may become publicly available or otherwise unprotectable.
(c) Such Grantor shall notify Agent immediately if it knows, or has reason to know, that any application or registration
relating to any Material Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any
adverse determination or development regarding the validity or enforceability or such Grantor’s ownership of, interest in, right to use, register,
own or maintain any Material Intellectual Property (including the institution of, or any such determination or development in, any proceeding
relating to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by Agent
to maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation
included in the Material Intellectual Property.
(d) Such Grantor shall not knowingly do any act or omit to do any act to infringe, misappropriate, dilute, violate or otherwise
impair the Intellectual Property of any other Person. In the event that any Material Intellectual Property of such Grantor is or has been
infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take such action as it reasonably deems
appropriate under the circumstances in response thereto, including (if reasonably deemed appropriate by such Grantor) promptly bringing suit
and recovering all damages therefor.
(e) Such Grantor shall execute and deliver to Agent in form and substance reasonably acceptable to Agent and suitable for
(i) filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached
hereto as Annex 3 for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the appropriate Internet
domain name registrar, a duly executed form of assignment for all Internet Domain Names of such Grantor (together with appropriate
supporting documentation as may be requested by Agent).
Section 5.8 Notices . Such Grantor shall promptly notify Agent in writing of its acquisition of any interest hereafter in property that
is of a type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal
statute or regulation.
Section 5.9 Controlled Securities Account . Each Grantor shall, to the extent required by Section 4.11 of the Credit Agreement,
deposit all of its Cash Equivalents in securities accounts that are Controlled Securities Accounts in accordance with Section 4.11 of the Credit
Agreement.
ARTICLE VI
REMEDIAL PROVISIONS
Section 6.1 PPSA and Other Remedies
(a) PPSA Remedies . During the continuance of an Event of Default, Agent may exercise, in addition to all other rights and
remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation,
all rights and remedies of a secured party under the PPSA or any other applicable law.
(b) Appointment of Receiver . Upon the occurrence and during the continuance of any Event of Default, Agent may appoint
or reappoint by instrument in writing, any Person or Persons, whether an officer or officers or an employee or employees of Agent or not, to be
an interim receiver, receiver or receivers (hereinafter called a “Receiver”, which term when used herein shall include a receiver and manager)
of Collateral (including any interest, income or profits therefrom) and may remove any Receiver so appointed and appoint another in his/her/its
stead. Any such Receiver shall, so far as concerns responsibility for his/her/its acts, be deemed the agent of the applicable Grantor and not
Agent or any of the Lenders, and neither Agent nor any Lender shall be in any way responsible for any misconduct, negligence or non-feasance
on the part of any such Receiver or his/her/its servants, agents or employees. Subject to the provisions of the instrument appointing him/her/it
and the provisions of applicable law, any such Receiver shall have power to take possession of Collateral, to preserve Collateral or its value, to
carry on or concur in carrying on all or any part of the business of the applicable Grantor and to sell, lease, license or otherwise dispose of or
concur in selling, leasing, licensing or otherwise disposing of Collateral. To facilitate the foregoing powers, any such Receiver may, to the
exclusion of all others, including the applicable Grantor, enter upon, use and occupy all premises owned or occupied by the applicable Grantor
wherein
Collateral may be situate, maintain Collateral upon such premises, borrow money on a secured or unsecured basis and use Collateral directly in
carrying on the applicable Grantor’s business or as security for loans or advances to enable the Receiver to carry on the applicable Grantor’s
business or otherwise, as such Receiver shall, in its discretion, determine. Except as may be otherwise directed by Agent, all money received
from time to time by such Receiver in carrying out his/her/its appointment shall be received in trust for and be paid over to Agent. Every such
Receiver may, in the discretion of Agent, be vested with all or any of the rights and powers of Agent.
(i) Agent may, either directly or through its agents or nominees, exercise any or all of the powers and rights given to a
Receiver by virtue of this Section 6.1(b).
(c) Disposition of Collateral . Without limiting the generality of the foregoing, Agent may, without demand of performance
or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defences, advertisements and notices are hereby waived), during the continuance
of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any
obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other
Person notice or opportunity for a hearing on Agent’s claim or action, (ii) collect, receive, appropriate and realize upon any Collateral and
(iii) sell, assign, convey, transfer, grant option or options to purchase and deliver any Collateral (and enter into Contractual Obligations to do
any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of any Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the
PPSA and other applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.
(d) Management of the Collateral . Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at
Agent’s request, it shall assemble the Collateral and make it available to Agent at places that Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere, (ii) without limiting the foregoing, Agent also has the right to require that each Grantor store and keep any
Collateral pending further action by Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as
shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until Agent is able to sell, assign,
convey or transfer any Collateral, Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the
purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by Agent and (iv) Agent may, if it so elects, seek
the appointment of a receiver or keeper to take possession
of any Collateral and to enforce any of Agent’s remedies (for the benefit of the Secured Parties), with respect to such appointment without prior
notice or hearing as to such appointment. Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor
as against third parties with respect to any Collateral while such Collateral is in the possession of Agent.
(e) Application of Proceeds . Agent shall apply the cash proceeds of any action taken by it pursuant to this Section 6.1, after
deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any
Collateral or in any way relating to the Collateral or the rights of Agent and any other Secured Party hereunder, including reasonable legal fees
and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Credit Agreement, and only after such
application and after the payment by Agent of any other amount required by any Requirement of Law, need Agent account for the surplus, if
any, to any Grantor.
(f) Direct Obligation . Neither Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust
any right or remedy against, any Grantor, any other Credit Party or any other Person with respect to the payment of the Canadian Obligations or
to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guarantee thereof. All of the rights and
remedies of Agent and any other Secured Party under any Loan Document shall be cumulative, may be exercised individually or concurrently
and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against Agent or any other Secured
Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defences it may have as a surety, now
or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any
Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
(g) Commercially Reasonable . To the extent that applicable Requirements of Law impose duties on Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for Agent to do any of the
following:
(i) fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by Agent to prepare any
Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished
products for disposition;
(ii) fail to obtain Permits, or other consents, for access to any Collateral to sell or for the collection or sale of any
Collateral, or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or
disposition of any Collateral;
(iii) fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens
on any Collateral or to remove any adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through publications or media of general circulation, whether or not such
Collateral is of a specialized nature, or to contact other Persons, whether or not in the same business as any Grantor, for
expressions of interest in acquiring any such Collateral;
(v) exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or
through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the
disposition of any Collateral, whether or not such Collateral is of a specialized nature, or, to the extent deemed appropriate
by Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist Agent in the
collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any
Collateral;
(vi) dispose of assets in wholesale rather than retail markets;
(vii) disclaim disposition warranties, such as title, possession or quiet enjoyment; or
(viii) purchase insurance or credit enhancements to insure Agent against risks of loss, collection or disposition of any
Collateral or to provide to Agent a guaranteed return from the collection or disposition of any Collateral.
Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list of actions or omissions that are
commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by any Secured Party shall not be
deemed commercially unreasonable solely on account of not being indicated in this Section 6.1. Without limitation upon the foregoing, nothing
contained in this Section 6.1 shall be construed to grant any rights to any Grantor or to impose any duties on Agent that would not have been
granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6.1.
(h) IP Licenses . For the purpose of enabling Agent to exercise rights and remedies under this Section 6.1 (including in order
to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, sell, assign, convey, transfer or grant options to
purchase any Collateral) at such time as Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to
Agent, for the benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or
other compensation to such Grantor),
including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor
and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation
or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate and occupy
all real Property owned, operated, leased, subleased or otherwise occupied by such Grantor.
Section 6.2 Accounts and Payments in Respect of Intangibles
(a) In addition to, and not in substitution for, any similar requirement in the Credit Agreement, if required by Agent at any
time during the continuance of an Event of Default, any payment of Accounts or payment in respect of intangibles, when collected by any
Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form received, duly endorsed by
such Grantor to Agent, in a Cash Collateral Account, subject to withdrawal by Agent as provided in Section 6.4. Until so turned over, such
payment shall be held by such Grantor in trust for Agent, segregated from other funds of such Grantor. Each such deposit of proceeds of
Accounts and payments in respect of intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(b) At any time during the continuance of an Event of Default:
(i) each Grantor shall, upon Agent’s request, deliver to Agent all original and other documents evidencing, and relating
to, the Contractual Obligations and transactions that gave rise to any Account or any payment in respect of intangibles,
including all original orders, invoices and shipping receipts and notify account debtors that the Accounts or intangibles have
been collaterally assigned to Agent and that payments in respect thereof shall be made directly to Agent;
(ii) Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the
authority of a Grantor to collect its Accounts or amounts due under intangibles or any thereof and, in its own name or in the
name of others, communicate with account debtors to verify with them to Agent’s satisfaction the existence, amount and
terms of any Account or amounts due under any intangible. In addition, during the continuance of an Event of Default,
Agent may at any time enforce such Grantor’s rights against such account debtors and obligors of intangibles; and
(iii) each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably
requested by Agent to ensure any Internet Domain Name is registered.
(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each Account and each payment
in respect of intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. No Secured Party shall have any obligation or liability under any agreement
giving rise to an Account or a payment in respect of an intangible by reason of or arising out of any Loan Document or the receipt by any
Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any
Grantor under or pursuant to any agreement giving rise to an Account or a payment in respect of an intangible, to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have
been assigned to it or to which it may be entitled at any time or times.
Section 6.3 Pledged Collateral
(a) Voting Rights . Subject to Section 8.14, during the continuance of an Event of Default, upon notice by Agent to the
relevant Grantor or Grantors, Agent or its nominee may exercise (i) any voting, consent, corporate and other right pertaining to the Pledged
Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or
otherwise and (ii) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged
Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger,
amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer
of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as Agent may determine), all without liability except to account for property actually
received by it; provided , however , that Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(b) Proxies . In order to permit Agent to exercise the voting and other consensual rights that it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly
execute and deliver (or cause to be executed and delivered) to Agent all such proxies, dividend payment orders and other instruments as Agent
may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a
holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as
the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy
shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person
(including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy
shall only terminate upon the payment in full of the Secured Obligations (other than contingent indemnification obligations to the extent no
claim giving rise thereto has been asserted).
(c) Authorization of Issuers . Each Grantor hereby expressly and irrevocably authorizes and instructs, without any further
instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction
received by it from Agent in writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this
Agreement and each Grantor agrees that such issuer shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless
otherwise expressly permitted hereby or the Credit Agreement, pay any dividend or make any other payment during the continuance of an
Event of Default with respect to the Pledged Collateral directly to Agent.
Section 6.4 Proceeds to be Turned over to and Held by Agent . Unless otherwise expressly provided in the Credit Agreement or this
Agreement, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust
for Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be
turned over to Agent in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of
any Collateral received by Agent in cash or Cash Equivalents shall be held by Agent in a Cash Collateral Account. All proceeds being held by
Agent in a Cash Collateral Account (or by such Grantor in trust for Agent) shall continue to be held as collateral security for the Secured
Obligations and shall not constitute payment thereof until applied as provided in the Credit Agreement.
Section 6.5 Sale of Pledged Collateral
(a) Each Grantor recognizes that Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain
prohibitions contained in Securities Laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially
reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree,
among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.
Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favourable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially
reasonable manner. Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the
issuer thereof to register such securities for public sale under Securities Laws even if such issuer would agree to do so.
(b) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such
sale or sales of any portion of the Pledged Collateral pursuant to Section 6.1 hereof and this Section 6.5 valid and binding and in compliance
with all applicable Requirements of Law. Each Grantor further agrees that a breach of any covenant contained herein will cause irreparable
injury to Agent and other Secured Parties, that Agent and the other Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained herein shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defence against an action for specific performance of such covenants except for a defence that no
Event of Default has occurred under the Credit Agreement. Each Grantor waives any and all rights of contribution or subrogation upon the sale
or disposition of all or any portion of the Pledged Collateral by Agent.
Section 6.6 Deficiency . Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any
Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by Agent or any other
Secured Party to collect such deficiency.
ARTICLE VII
AGENT
Section 7.1 Agent’s Appointment as Attorney-in-Fact
(a) Each Grantor hereby irrevocably constitutes and appoints Agent and any Related Person thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the
name of such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents, to take any appropriate action and
to execute any document or instrument that may be necessary or desirable to accomplish the purposes of the Loan Documents, and, without
limiting the generality of the foregoing, each Grantor hereby gives Agent and its Related Persons the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:
(i) in the name of such Grantor, in its own name or otherwise, take possession of and endorse and collect any cheque,
draft, note, acceptance or other instrument for the payment of moneys due under any Account or intangible or with respect to
any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by Agent for the purpose of collecting any such moneys due under any Account or intangible or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property owned by or licensed to such Grantor, execute, deliver and have recorded
any document that Agent may request to evidence, effect, publicize or record Agent’s security interest in such Intellectual
Property and the goodwill and intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay
any insurance called for by the terms of the Credit Agreement (including all or any part of the premiums therefor and the
costs thereof);
(iv) execute, in connection with any sale provided for in Section 6.1 hereof or Section 6.5 hereof, any document to
effect or otherwise necessary or appropriate in relation to evidence the sale of any Collateral;
(v) (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become
due thereunder directly to Agent or as Agent shall direct, (B) ask or demand for, and collect and receive payment of and
receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any
Collateral, (C) sign and endorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against
debtors, assignment, verification, notice and other document in connection with any Collateral, (D) commence and prosecute
any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to
enforce any other right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands,
orders or disputes brought against such Grantor with respect to any Collateral, (F) settle, compromise or adjust any such
actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or
releases as Agent may deem appropriate, (G) assign any Intellectual Property owned by such Grantor or any IP Licenses of
such Grantor throughout the world on such terms and conditions and in such manner as Agent shall in its sole discretion
determine, including the execution and filing of any document necessary to effectuate or record such assignment and
(H) generally, sell, assign, convey, transfer or grant a Lien on, make any Contractual Obligation with respect to and
otherwise deal with, any Collateral as fully and completely as though Agent were the absolute owner thereof for all purposes
and do, at Agent’s option, at any time or from time to time, all acts and things that Agent deems necessary to protect,
preserve or realize upon any Collateral and the Secured Parties’ security interests therein and to effect the intent of the Loan
Documents, all as fully and effectively as such Grantor might do; or
(vi) If any Grantor fails to perform or comply with any Contractual Obligation contained herein, Agent, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such
Contractual Obligation.
(b) The out-of-pocket expenses of Agent incurred in connection with actions undertaken as provided in this Section 7.1,
together with interest thereon at a rate set forth in Section 1.3(c) of the Credit Agreement, from the date of payment by Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to Agent on demand.
(c) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7.1. All
powers, authorizations, proxies and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
Section 7.2 Authorization to File Financing Statements . Each Grantor authorizes Agent and its Related Persons, at any time and
from time to time, to file or record financing statements, financing change statements thereto, and other filing or recording documents or
instruments with respect to any Collateral in such form and in such offices as Agent reasonably determines appropriate to perfect the security
interests of Agent under this Agreement, and such financing statements and financing change statements may describe the Collateral covered
thereby as “ all present and after acquired assets of the debtor ”. Such Grantor also hereby ratifies its authorization for Agent to have filed any
initial financing statement or financing change statement thereto under the PPSA (or other similar laws) in effect in any jurisdiction if filed
prior to the date hereof. To the extent permitted under the PPSA, each Grantor hereby (i) waives any right under the PPSA or any other
Requirement of Law to receive notice and/or copies of any filed or recorded financing statements, amendments thereto, continuations thereof or
termination statements and (ii) releases and excuses each Secured Party from any obligation under the PPSA or any other Requirement of Law
to provide notice or a copy of any such filed or recorded documents.
Section 7.3 Authority of Agent . Each Grantor acknowledges that the rights and responsibilities of Agent under this Agreement with
respect to any action taken by Agent or the exercise or non-exercise by Agent of any option, voting right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Agreement shall, as between Agent and the other Secured Parties, be governed by
the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between Agent
and any Grantor, Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.
Section 7.4 Duty; Obligations and Liabilities
(a) Duty of Agent. Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in
its possession shall be to deal with it in the same manner as Agent deals with similar property for its own account. The powers conferred on
Agent hereunder are solely to protect Agent’s interest in the Collateral, for the benefit of the Secured Parties, and shall not impose any duty
upon
Agent to exercise any such powers. Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and
neither it nor any of its Related Persons shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition, Agent shall not be liable or responsible
for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen,
carrier, forwarding agency, consignee or other bailee if such Person has been selected by Agent in good faith.
(b) Obligations and Liabilities with respect to Collateral . No Secured Party and no Related Person thereof shall be liable for
failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any
Collateral. The powers conferred on Agent hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The
other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither
they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Reinstatement . Each Grantor agrees that, if any payment made by any Credit Party or other Person and applied to the
Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Credit Party, its
estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, provincial, territorial or federal law, common law
or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in
full force and effect, as fully as if such payment had never been made. If, prior to any of the foregoing, (a) any Lien or other Collateral securing
such Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of the Guarantee
hereunder shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and
effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the
obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.
Section 8.2 Release of Collateral
(a) At the time provided in Section 8.10(b)(iii) of the Credit Agreement, the Collateral shall be released from the Lien
created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. Each Grantor is hereby authorized to file PPSA financing change statements at such time evidencing the termination of
the Liens so released. At the request of any Grantor following any such termination, Agent shall promptly deliver to such Grantor any
Collateral of such Grantor held by Agent hereunder and shall promptly execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.
(b) If Agent shall be directed or permitted pursuant to Section 8.10(b) of the Credit Agreement to release any Lien or any
Collateral, such Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions
set forth in, Section 8.10(b) of the Credit Agreement. In connection therewith, Agent, at the request of any Grantor, shall promptly execute and
deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such release.
(c) At the time provided in Section 8.10(b) of the Credit Agreement and at the request of the Canadian Borrower, a Grantor
shall be automatically released from its obligations hereunder in the event that all the Stock and Stock Equivalents of such Grantor shall be sold
to any Person that is not an Affiliate of Holdings, the Canadian Borrower or the Subsidiaries of the Canadian Borrower in a transaction
permitted by the Loan Documents.
Section 8.3 Independent Obligations . The obligations of each Grantor hereunder are independent of and separate from the Secured
Obligations and the Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is not paid when due, or upon the occurrence
and during the continuance of any Event of Default, Agent may, at its sole election, proceed directly and at once, without notice, against any
Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first
proceeding against any other Grantor, any other Credit Party or any other Collateral and without first joining any other Grantor or any other
Credit Party in any proceeding.
Section 8.4 No Waiver by Course of Conduct . No Secured Party shall by any act (except by a written instrument pursuant to
Section 8.5), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other
right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy that such Secured Party would otherwise have on any future occasion.
Section 8.5 Amendments in Writing . None of the terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except in accordance with Section 9.1 of the Credit Agreement; provided , however , that annexes to this Agreement may
be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder
Agreements, in substantially the form of Annex 1 and Annex 2 to this Agreement, respectively, in each case duly executed by Agent and each
Grantor directly affected thereby.
Section 8.6 Additional Grantors; Additional Pledged Collateral
(a) Joinder Agreements . If, at the option of the Canadian Borrower or as required pursuant to Section 4.13 of the Credit
Agreement, the Canadian Borrower shall cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary shall
execute and deliver to Agent a Joinder Agreement substantially in the form of Annex 2 to this Agreement and shall thereafter for all purposes
be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.
(b) Pledge Amendments . To the extent any Pledged Collateral has not been delivered as of the Closing Date, such Grantor
shall deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 to this Agreement (each, a “ Pledge
Amendment ”). Such Grantor authorizes Agent to attach each Pledge Amendment to this Agreement.
Section 8.7 [Intentionally Deleted]
Section 8.8 Notices . All notices, requests and demands to or upon Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 9.2 of the Credit Agreement; provided , however , that any such notice, request or demand to or upon any Grantor shall
be addressed to the Canadian Borrower’s notice address set forth in Section 9.2 of the Credit Agreement.
Section 8.9 Successors and Assigns . This Agreement shall be binding upon the successors and assigns of each Grantor and shall
inure to the benefit of each Secured Party and their successors and assigns; provided , however , that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior written consent of Agent.
Section 8.10 Counterparts . This Agreement may be executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the
same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or by
Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
Section 8.11 Severability . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not
affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision
in any other jurisdiction.
Section 8.12 Governing Law . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE
OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE HEREIN.
Section 8.13 Waiver of Jury Trial . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO
(WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.13 .
EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SECTIONS 9.18(b) and 9.18(c) OF THE CREDIT
AGREEMENT.
Section 8.14 Permitted Liens
The inclusion or reference to Permitted Liens in this Agreement or in any other Loan Document is not intended to subordinate and shall
not subordinate, and shall not be interpreted as subordinating, the Lien and security interest created by this Agreement or any other Loan
Document to any Permitted Liens.
Section 8.15 ULC Limitation
Notwithstanding any provisions to the contrary contained in this Agreement, the Credit Agreement or any other document or agreement
among all or some of the parties hereto, each Grantor is as of the date of this Agreement the sole registered and beneficial owner of all Pledged
ULC Shares more particularly described in Schedule 4 to this Agreement and will remain so until such time as such Pledged ULC Shares are
fully and
effectively transferred into the name of Agent or any other person on the books and records of such ULC. Nothing in this Agreement, the
Credit Agreement or any other document or agreement delivered among all or some of the parties hereto is intended to or shall constitute Agent
or any person other than a Grantor to be a member or shareholder of any ULC until such time as written notice is given by Agent or such other
person to the applicable Grantor and all further steps are taken so as to register Agent or other person as holder of the Pledged ULC Shares. The
granting of the pledge and security interest pursuant to Article III does not make Agent a successor to any Grantor as a member or shareholder
of any ULC, and neither Agent nor any of its respective successors or assigns hereunder shall be deemed to become a member or shareholder
of any ULC by accepting this Agreement or exercising any right granted herein unless and until such time, if any, when Agent or any successor
or assign expressly becomes a registered member or shareholder of any ULC. Each Grantor shall be entitled to receive and retain for its own
account any dividends or other distributions if any, in respect of the Collateral, and shall have the right to vote such Pledged ULC Shares and to
control the direction, management and policies of the ULC issuing such Pledged ULC Shares to the same extent as such Grantor would if such
Pledged ULC Shares were not pledged to Agent or to any other person pursuant hereto. To the extent any provision hereof would have the
effect of constituting Agent to be a member or shareholder of any ULC prior to such time, such provision shall be severed herefrom and
ineffective with respect to the relevant Pledged ULC Shares without otherwise invalidating or rendering unenforceable this Agreement or
invalidating or rendering unenforceable such provision insofar as it relates to Collateral other than Pledged ULC Shares. Notwithstanding
anything herein to the contrary (except to the extent, if any, that Agent or any of its successors or assigns hereafter expressly becomes a
registered member or shareholder of any ULC), neither Agent nor any of its respective successors or assigns shall be deemed to have assumed
or otherwise become liable for any debts or obligations of any ULC. Except upon the exercise by Agent or other persons of rights to sell or
otherwise dispose of Pledged ULC Shares or other remedies following the occurrence and during the continuance of an Event of Default, each
Grantor shall not cause or permit, or enable any ULC in which it holds Pledged ULC Shares to cause or permit, Agent to: (a) be registered as
member or shareholder of such ULC; (b) have any notation entered in its favour in the share register of such ULC; (c) be held out as member or
shareholder of such ULC; (d) receive, directly or indirectly, any dividends, property or other distributions from such ULC by reason of Agent
or other person holding a security interest in the Pledged ULC Shares; or (e) act as a member or shareholder of such ULC, or exercise any
rights of a member or shareholder of such ULC, including the right to attend a meeting of such ULC or vote the shares of such ULC.
Section 8.16 Amalgamation
Each Grantor acknowledges and agrees that, in the event it amalgamates with any other corporation or corporations, it is the intention of the
parties hereto that the term “Grantor”, when used herein, shall apply to each of the amalgamating corporations and to the amalgamated
corporation, such that the security interest granted hereby:
(a) shall extend to “Collateral” (as that term is herein defined) owned by each of the amalgamating corporations and the
amalgamated corporation at the time of amalgamation and to any “Collateral” thereafter owned or acquired by the amalgamated corporation,
and
(b) shall secure all “Canadian Obligations” (as that term is herein defined) of each of the amalgamating corporations and the
amalgamated corporation to Agent and Secured Parties at the time of amalgamation and all “Canadian Obligations” of the amalgamated
corporation to Agent and Secured Parties thereafter arising. The security interest shall attach to all “Collateral” owned by each corporations
amalgamating with any Grantor, and by the amalgamated company, at the time of the amalgamation, and shall attach to all “Collateral”
thereafter owned or acquired by the amalgamated corporation when such becomes owned or is acquired.
[ Remainder of page intentionally blank; signature pages follow. ]
IN WITNESS WHEREOF , each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first
above written.
ALERIS SPECIFICATION ALLOY PRODUCTS
CANADA COMPANY,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
President
REAL ALLOY CANADA COMPANY,
as Grantor
By:
Name:
Title:
/s/ Kyle Ross
Kyle Ross
President
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent
By:
Name:
Title:
/s/ Michael R. Todorow
Michael R. Todorow
Its Duly Authorized Signatory
Exhibit 10.5
Execution Version
INTERCREDITOR AGREEMENT
Dated as of February 27, 2015
among
GENERAL ELECTRIC CAPITAL CORPORATION,
as North America ABL Agent
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Notes Collateral Trustee
and acknowledged and agreed to by
REAL ALLOY INTERMEDIATE HOLDING, LLC, as Holdings
REAL ALLOY HOLDING, INC., as the Company
and the Grantors
TABLE OF CONTENTS
Page
SECTION I Definitions
1.1
1.2
Defined Terms
Terms Generally
SECTION II Lien Priorities
2.1
2.2
2.3
2.4
Relative Priorities
Prohibition on Contesting Liens; No Marshalling
No New Liens
Similar Liens and Agreements
SECTION III Enforcement
3.1
3.2
3.3
3.4
3.5
Restrictions on Exercise of Remedies by the Notes Collateral Trustee and the other Notes Pari Passu Lien
Claimholders with respect to the North America ABL Priority Collateral
Restrictions on Exercise of Remedies by the North America ABL Agent and the other North America ABL
Claimholders with respect to the Notes Priority Collateral
Collateral Access Rights
Notes General Intangibles Rights/Access to Information
Set-Off and Tracing of and Priorities in Proceeds
SECTION IV Payments
4.1
4.2
Application of Proceeds
Payments Over
SECTION V Other Agreements
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Releases
Insurance
Amendments to North America ABL Loan Documents and Indenture Pari Passu Lien Debt Documents
Confirmation of Subordination in Subordinated Lien Collateral Documents
Gratuitous Bailee/Agent for Perfection
When Discharge of Obligations Deemed to Not Have Occurred
Purchase Right
SECTION VI Insolvency or Liquidation Proceedings
6.1
Finance and Sale Issues
3
3
20
20
20
21
22
22
23
23
27
31
32
33
34
34
35
36
36
38
39
42
42
45
46
48
48
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
6.11
Relief from the Automatic Stay
Adequate Protection
Avoidance Issues
Reorganization Securities
Post-Petition Interest
Waiver
Separate Grants of Security and Separate Classification
Effectiveness in Insolvency or Liquidation Proceedings
Asset Dispositions
Plan of Reorganization
49
49
50
50
50
50
51
51
52
53
SECTION VII Reliance; Waivers; Etc.
7.1
7.2
7.3
7.4
53
Reliance
No Warranties or Liability
No Waiver of Lien Priorities
Obligations Unconditional
53
53
54
56
SECTION VIII Miscellaneous
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12
8.13
8.14
8.15
8.16
8.17
57
Integration/Conflicts
Effectiveness; Continuing Nature of this Agreement; Severability
Amendments; Waivers
Information Concerning Financial Condition of the Company and its Subsidiaries
Subrogation
SUBMISSION TO JURISDICTION; WAIVERS
WAIVER OF JURY TRIAL
Notices
Further Assurances
Applicable Law
Binding on Successors and Assigns
Headings
Counterparts
Authorization
No Third Party Beneficiaries/Provisions Solely to Define Relative Rights
No Indirect Actions
Grantors; Additional Grantors
ii
57
57
58
58
59
60
61
61
61
61
62
62
62
62
62
62
63
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT ( “Agreement” ), is dated as of February 27, 2015, and entered into by and among
(i) GENERAL ELECTRIC CAPITAL CORPORATION , a Delaware corporation ( “GECC” ), in its capacity as “Agent” for the holders
of the “Obligations” under the North America ABL Credit Agreement (as defined below), including its successors and assigns from time to
time (the “North America ABL Agent” ), (ii) WILMINGTON TRUST, NATIONAL ASSOCIATION ( “Wilmington” ), not in its
individual capacity, but solely in its capacity as notes collateral trustee under the Indenture Pari Passu Lien Documents (as defined below),
including its successors and assigns from time to time (the “Notes Collateral Trustee” ) and (iii) acknowledged and agreed to by REAL
ALLOY INTERMEDIATE HOLDING, LLC , a Delaware limited liability company ( “Holdings” ), REAL ALLOY HOLDING, INC ,
(f/k/a SGH Acquisition Holdco, Inc. and a successor by merger to SGH Escrow Corporation), a Delaware corporation (the “Company” ), and
the Grantors (as defined below) from time to time party hereto. Capitalized terms used in this Agreement have the meanings assigned to them
in Section 1 below.
RECITALS
The North America ABL Credit Parties (as defined below), the lenders from time to time party thereto and the North America ABL
Agent have entered into that certain Revolving Credit Agreement dated as of the date hereof (as further amended, restated, supplemented,
modified, replaced or refinanced from time to time, the “North America ABL Credit Agreement” );
Holdings, the Company and the other Indenture Parties (as defined below), Wilmington Trust, National Association, as Trustee (in such
capacity, the “ Trustee ”) and the Notes Collateral Trustee, have entered into that certain Indenture dated as of January 8, 2015 (as
supplemented by the First Supplemental Indenture, dated as of the date hereof, and as may be further amended, restated, supplemented,
modified, replaced or refinanced from time to time, the “Indenture” ) providing for the issuance of senior secured notes of the Company (the “
Initial Notes ”);
Pursuant to the North America ABL Credit Agreement and that certain U.S. Revolving Guaranty and Security Agreement, dated as of the
date hereof (as amended, restated, supplemented, modified, replaced or refinanced from time to time, the “U.S. Revolving Guaranty and
Security Agreement” ), the “Guarantors” thereunder have agreed to guarantee, and to cause certain current and future Subsidiaries to agree to
guarantee all “Obligations” thereunder of all of the “Borrowers” thereunder; and pursuant to the North America ABL Credit Agreement and
that certain Canada Revolving Guaranty and Security Agreement dated as the date hereof (as amended, restated, supplemented, modified,
replaced or refinanced from time to time, the “Canada Revolving Guaranty and Security Agreement” and, together with the U.S. Revolving
Guaranty and Security Agreement, the “North America ABL Guaranty and Security Agreements” ), the “Guarantors” thereunder have
agreed to guarantee, and to cause certain current and future Subsidiaries to agree to guarantee all “Obligations” thereunder of the “Canadian
Borrower” thereunder;
Pursuant to the Indenture, Holdings and the other Indenture Parties have agreed to guarantee, and to cause certain current and future
Subsidiaries to guarantee (such guarantee, the “Notes Guaranty” ) the Notes Pari Passu Lien Obligations (as defined below), and pursuant to
other future Indenture Pari Passu Lien Debt Documents (as defined below), the Indenture Parties may guarantee, and cause certain current and
future Subsidiaries to guarantee (such guarantee, the “ Other Indenture Pari Passu Lien Guaranty ”; and together with the Notes Guaranty,
the “ Indenture Pari Passu Lien Guaranties ”) the Notes Pari Passu Lien Obligations;
The obligations of the Grantors (as defined below) under and as described in the North America ABL Credit Agreement, any North
America ABL Hedge Agreements, and the North America ABL Guaranty and Security Agreements will be secured on a first priority basis by
Liens on substantially all the assets constituting North America ABL Priority Collateral (as defined below) and a second priority basis by liens
on substantially all the assets constituting Notes Priority Collateral (as defined below) pursuant to the terms of the North America ABL
Collateral Documents;
The obligations of the Grantors under and as described in the Indenture and any other future Indenture Pari Passu Lien Debt Documents,
any Collateral Trust Hedge Agreements (as defined below), and the Indenture Pari Passu Lien Guaranties will be secured on a first priority
basis by liens on substantially all the assets constituting Notes Priority Collateral and a second priority basis by liens on substantially all the
assets constituting North America ABL Priority Collateral pursuant to the terms of the Indenture Pari Passu Lien Collateral Documents; and
The North America ABL Loan Documents (as defined below), and the Indenture Pari Passu Lien Debt Documents provide, among other
things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral (as defined
below).
In order to (a) induce the North America ABL Agent and the other North America ABL Claimholders (as defined below) to consent to
Grantors incurring the Notes Pari Passu Lien Obligations and to induce the North America ABL Claimholders to extend credit and other
financial accommodations and lend monies to or for the benefit of the Grantors and (b) induce the Notes Collateral Trustee and the other Notes
Pari Passu Lien Claimholders (as defined below) to consent to Grantors incurring the North America ABL Obligations and to induce the Notes
Pari Passu Lien Claimholders to extend credit and other financial accommodations and lend monies to or for the benefit of the Grantors, each
of the Notes Collateral Trustee on behalf of itself and the other Notes Pari Passu Lien Claimholders and the North America ABL Agent on
behalf of itself and the other North America ABL Claimholders has agreed to the intercreditor and other provisions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
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SECTION I
DEFINITIONS
1.1 Defined Terms . As used in the Agreement, the following terms shall have the meanings set forth below.
“Access Period” means for each Real Estate Asset and any other Notes Priority Collateral consisting of Equipment (including fixtures)
located thereon, the period, which begins on the earlier of (i) the day on which the North America ABL Agent provides the Notes Collateral
Trustee with an Enforcement Notice; and (ii) the date on which the Notes Collateral Trustee provides the North America ABL Agent with the
notice required by Section 3.3(a) that the Notes Collateral Trustee (or its agent) has either obtained possession or control of such Real Estate
Asset or sold or otherwise disposed of such Real Estate Asset and ends on the earliest of (A) the 120 th day after such date; provided , however
, that such 120 day period shall be tolled during any period during which the North America ABL Agent is stayed or otherwise prohibited by
law or court order from exercising remedies with respect to North America ABL Priority Collateral located on such Real Estate Asset; (B) the
date on which all or substantially all of the North America ABL Priority Collateral located on such Real Estate Asset is sold, collected or
liquidated; and (C) the Discharge of North America ABL Obligations, in the case of Collateral located thereon.
“Account Agreements” means any lockbox account agreement, pledged account agreement, blocked account agreement, securities
account control agreement, or any similar deposit or securities account agreements among the North America ABL Agent and/or the Notes
Collateral Trustee, one or more Grantors and the relevant financial institution depository or securities intermediary.
“Accounts” means all present and future “accounts” (as defined in Article 9 of the UCC), whether or not the UCC is applicable thereto.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person specified. For purposes of this definition, a Person shall be deemed to
“control” or be “controlled by” a Person if such Person possesses, directly or indirectly, power to direct or cause the direction of the
management or policies of such Person whether through ownership of equity interests, by contract or otherwise.
“Agent” means the North America ABL Agent and/or the Notes Collateral Trustee, as the context may require.
“Agreement” means this Intercreditor Agreement, as amended, restated, renewed, extended, supplemented or otherwise modified from
time to time in accordance with Section 8.3 .
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor
statute.
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“Bankruptcy Law” means the Bankruptcy Code, the UK Insolvency Act 1986, the UK Companies Act 2006 (insofar as it relates to a
scheme of arrangement), the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-Up
and Restructuring Act (Canada), any successor statute and any similar federal, state, provincial, territorial or foreign law (including common
law) in respect of voluntary or involuntary insolvency, liquidation, dissolution, wind-up, arrangement, reorganization, receivership or the relief
of debtors and affecting the rights of creditors generally from time to time in effect.
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City or London are
authorized or required by law to close.
“Canada Revolving Guaranty and Security Agreement” has the meaning assigned to that term in the Recitals to this Agreement.
“Claimholders” means the North America ABL Claimholders and/or the Notes Pari Passu Lien Claimholders, as the context may
require.
“Collateral” means all of the assets and property of any Grantor, whether real, Personal or mixed, in or upon which Liens are granted, or
required to be granted, to secure both the North America ABL Obligations and the Notes Pari Passu Lien Obligations, including any property
subject to Liens granted pursuant to Section VI to secure both the North America ABL Obligations and the Notes Pari Passu Lien Obligations.
“ Collateral Trust Agreement ” means that Collateral Trust Agreement dated as of the date hereof, by and among the Trustee and the
Note Collateral Trustee, on behalf of the Notes Pari Passu Lien Claimholders, and acknowledged by the Grantors, specifying the equal and
ratable lien sharing and related matters as among the Notes Pari Passu Lien Claimholders.
“ Collateral Trust Hedge Agreement ” means a Hedging Agreement entered into between the Company or any other Indenture Party
and a Collateral Trust Hedge Bank.
“ Collateral Trust Hedge Bank ” means a “Hedge Bank” under and as defined in the Collateral Trust Agreement.
“ Collateral Trust Hedging Obligations ” means “Secured Hedging Obligations” as defined in the Collateral Trust Agreement.
“Company” has the meaning assigned to that term in the Preamble to this Agreement.
“Comparable Subordinated Lien Loan Document” means, in relation to any Collateral subject to any Lien created under any Prior
Lien Loan Document, the Subordinated Lien Loan Document that creates a Lien on the same Collateral, granted by the same Grantor.
“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or otherwise, and the term “ controlled ” shall have meanings
correlative thereto.
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“Copyright Licenses” means any written agreement naming any Grantor as licensor or licensee, granting any right under any Copyright
or copyrights owned by a third party, including the grant of rights to reproduce, distribute, display, perform, create derivative works of and
otherwise exploit material works protected by any Copyright.
“Copyrights” means each of the following that is owned by any Grantor: (i) all copyrights arising under the laws of the United States,
any other country or group of countries or any political subdivision thereof, whether registered or unregistered and whether published or
unpublished, all registrations and recordings thereof,