Exhibit 10.13

THIRD AMENDMENT TO ABL CREDIT AGREEMENT

This THIRD AMENDMENT TO ABL CREDIT AGREEMENT, dated as of May 1, 2023 (this “Amendment”), to the ABL Credit Agreement, dated as of April 4, 2019 (as amended by the First Amendment to ABL Credit Agreement, dated as of January 10, 2020, the Second Amendment to ABL Credit Agreement, dated as of December 22, 2021, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time immediately prior to the effectiveness of this Amendment, the “Credit Agreement”; the Credit Agreement, after giving effect to the effectiveness of this Amendment, the “Amended Credit Agreement”), among Dynasty Intermediate Co., Inc., a Delaware corporation (“Holdings”), Dynasty Acquisition Co., Inc., a Delaware corporation (the “U.S. Borrower”), Standard Aero Limited Standaero Limitee, a British Columbia limited company (the “Canadian Borrower”), StandardAero Aviation Holdings, Inc., a Delaware corporation (the “U.S. Co-Borrower”), the other Borrowers from time to time party thereto, each lender from time to time party thereto (collectively, the “Lenders” and each, individually, a “Lender”), each L/C Issuer party thereto and Royal Bank of Canada (“Royal Bank”), as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent (in such capacity, the “Collateral Agent”), is entered into by and among the Borrowers, Holdings, the Subsidiary Guarantors party hereto, the Administrative Agent, the Collateral Agent, each L/C Issuer party hereto, the Extending Lenders (as defined below) party hereto, the Assignor Lenders (as defined below) and HSBC Bank, National Association (the “New Revolving Credit Lender”).

W I T N E S S E T H:

WHEREAS, in accordance with the final paragraph of the definition of “Eurocurrency Rate”, the Administrative Agent has determined that the circumstances set forth in Section 3.04 of the Credit Agreement have not arisen but the supervisor or the administrator of the London interbank offered rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the London interbank offered rate shall no longer be used for determining interest rates for loans in Dollars, and the Administrative Agent and Holdings have endeavored to establish an alternate benchmark floating term rate of interest to the Eurocurrency Rate that is generally accepted as the then prevailing market convention for determining a rate of interest for similar syndicated loans in the United States at this time and have included the spread or method for determining a spread or other adjustments or modifications that are generally accepted as the then prevailing market convention for determining such spread, method, adjustment or modification, and the Administrative Agent and Holdings have agreed to enter into this Amendment to reflect such alternate rate of interest and such other related changes to the Credit Agreement as are set forth herein (the “SOFR Transition”);

WHEREAS, pursuant to and in accordance with Section 2.19(b) of the Credit Agreement, the U.S. Borrower, in its capacity as the Borrower Representative, has requested to extend the Maturity Date as set forth in the Credit Agreement with respect to (i) the U.S. Commitments of each U.S. Revolving Credit Lender under the Credit Agreement (the “U.S. Commitment Extension”) and (ii) the Canadian Commitments of each Canadian Revolving Credit Lender under the Credit Agreement (the “Canadian Commitment Extension”; the U.S. Commitment Extension together with the Canadian Commitment Extension, collectively, the “Extensions”), and the existing Revolving Credit Lenders that have agreed to such maturity extension with respect to the Loans and/or unfunded Commitments held prior to or immediately following the Third Amendment Effective Date (the “Extending Lenders”) hereby consent to such Extension Request with respect to the Extensions as set forth in the Amended Credit Agreement and in the amounts indicated on Annex I hereto;

WHEREAS, the Borrowers have requested that the New Revolving Credit Lender provide, and the New Revolving Credit Lender has agreed to provide, the Commitments in the amounts set forth opposite its name on Annex I hereto;

WHEREAS, the Administrative Agent, in its capacity as the Extended Loans Agent with respect to the Extensions, has agreed to waive the Extension Request requirements set forth in Section 2.19(b) of the Credit Agreement, including the ten Business Day prior notice period;

WHEREAS, (a) the Borrowers, Holdings, the Administrative Agent and each of the existing Revolving Credit Lenders that is an Extending Lender that executes and delivers a signature page to this Amendment in the form of Annex II hereto (a “Lender Consent”) have agreed, and in the case of the existing Revolving Credit Lenders that are Extending Lenders that deliver a Lender Consent will thereby agree, to amend certain provisions of the Credit Agreement as provided for herein in accordance with the final paragraph of the definition of “Eurocurrency Rate” and Section 2.19 and 10.01 of the Credit Agreement, and (b) the New Revolving Credit Lender has agreed to the Amended Credit Agreement; and

WHEREAS, in connection with the foregoing, it is intended that (a) the Administrative Agent and Holdings will amend the Credit Agreement to, among other things, reflect an alternate benchmark floating term rate of interest to the Eurocurrency Rate for Dollar-denominated Loans, (b) the Maturity Date as set forth in the Credit Agreement with respect to the U.S. Commitments and the Canadian Commitments will be extended and (c) all fees, costs and expenses incurred in connection with the SOFR Transition, the Extensions will be paid in accordance with Section 4.3 hereof.

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

SECTION 1. DEFINED TERMS; INTERPRETATION, ETC.

Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Credit Agreement. This Amendment is a “Loan Document”, as defined in the Credit Agreement.

SECTION 2. NEW REVOLVING CREDIT LENDER.

2.1 On and as of the date hereof, the New Revolving Credit Lender hereby agrees to provide the Commitments to the Borrowers in an aggregate principal amount equal to the amount set forth opposite the New Revolving Credit Lender’s name on Annex I hereto, on the terms set forth herein and in the Amended Credit Agreement, and subject to the conditions set forth in Section 4 below.

2.2 The New Revolving Credit Lender hereby (a) confirms that a copy of the Credit Agreement and the other applicable Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment and provide the Commitments, as applicable, have been made available to the New Revolving Credit Lender by the Administrative Agent and, with respect to the other applicable Loan Documents, to the extent requested by the New Revolving Credit Lender prior to the date hereof; (b) agrees that it will, independently and without reliance upon the Administrative Agent, any Agent-Related Person or any other Lender or agent and based on such documents and information as it has deemed appropriate at the time, made its own appraisal of, and investigation into, the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated under the Credit Agreement and the other applicable Loan Documents, including this Amendment, and made its own decision to enter into this Agreement and to extend credit to the Borrowers and the other Loan Parties under the Amended Credit Agreement or the other applicable Loan Documents, including this Amendment; (c) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Amended Credit Agreement and the other Loan

 

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Documents as are delegated to the Administrative Agent, as the case may be, by the terms thereof, together with such powers as are reasonably incidental thereto; (d) acknowledges and agrees that upon the Third Amendment Effective Date (as defined below), the New Revolving Credit Lender shall be a “Lender” and “Revolving Credit Lender”, as applicable, under, and for all purposes of, the Amended Credit Agreement and the other Loan Documents, and shall be subject to and bound by the terms thereof, and shall perform all the obligations of and shall have all rights of a Lender thereunder; and (e) consents to each amendment set forth in Section 3 hereof in its capacity as a New Revolving Credit Lender.

SECTION 3. AMENDMENTS TO THE CREDIT AGREEMENT.

3.1 Subject to satisfaction (or waiver) of the conditions set forth in Section 4 hereof, on the Third Amendment Effective Date (as defined below), the Credit Agreement is hereby amended to (i) delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Annex III attached hereto, (ii) replace the forms of Committed Loan Notice and Optional Prepayment of Loans, attached to the Credit Agreement as Exhibits A-1 and J, respectively, with the amended form of Committed Loan Notice and Optional Prepayment of Loans attached hereto as Annex IV and (iii) replace Schedule 10.02 to the Credit Agreement (Administrative Agent’s Office, Certain Addresses for Notices) with the amended Schedule 10.02 attached hereto as Annex V, and the Credit Agreement, as so amended, is hereby ratified, approved and confirmed in each and every respect by all parties hereto. The rights and obligations of the parties to the Credit Agreement with respect to the period prior to the Third Amendment Effective Date shall not be affected by such amendment.

3.2 For the avoidance of doubt, on the Third Amendment Effective Date, any Eurocurrency Rate Loan denominated in Dollars outstanding under the Credit Agreement as of the Third Amendment Effective Date (an “Existing LIBOR Borrowing”) shall automatically convert to a Loan that is a Term SOFR Rate Loan in the amount of such Existing LIBOR Borrowing and with an Interest Period with the nearest length to the existing Interest Period applicable to such Existing LIBOR Borrowing on the Third Amendment Effective Date, unless, with respect to the length of such Interest Period, the Borrower elects otherwise in accordance with the terms of the Amended Credit Agreement. Further, each Lender party hereto agrees to waive any loss, cost or expense to which it would otherwise be entitled pursuant to Section 3.06 of the Credit Agreement as a result of any Existing LIBOR Borrowings converting to Term SOFR Rate Loans on the Third Amendment Effective Date.

3.3 By executing and delivering its signature hereto, each of the existing Revolving Credit Lenders listed in the table below as an “Assignor Lender” is consenting to this Amendment solely to effectuate the Assignment (as defined below) and hereby assigning immediately prior to the effectiveness of this Amendment other than with respect to Section 2 and this Section 3.3 (the “Assignment”), all of such existing Revolving Credit Lender’s Loans, unfunded Commitments and all other rights and obligations in respect of the Obligations to the Revolving Credit Lender(s) set forth opposite its name in the amounts indicated in the table below. Each Assignee Lender (as defined below) by executing and delivering its signature hereto irrevocably purchases and assumes (and each of the U.S. Borrower, in its capacity as the Borrower Representative, the Administrative Agent and each L/C Issuer expressly consents to each such purchase and assumption) from its respective Assignor Lender such Assignor Lender’s Loans, unfunded Commitments and all other rights and obligations in respect of the Obligations, in each case of the foregoing, as if such Assignee Lenders and Assignor Lenders were party to an Assignment and Assumption.

 

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Existing Revolving Credit Lender (each, an “Assignor Lender”)		Revolving Credit Lender (each, an “ Assignee Lender”)		Amount of U.S. Commitments Subject to the Assignment		Amount of Canadian Commitments Subject to the Assignment
Regions Bank		HSBC Bank, National Association		$30,000,000.00		$16,000,000.00
JFIN Business Credit Fund I LLC		Royal Bank of Canada		$1,250,000.00		$2,750,000.00
		Wells Fargo Bank, N.A.		$1,666,666.67		$0.00
		Wells Fargo Capital Finance Corporation		$0.00		$1,333,333.33
		Bank of America, N.A.		$1,666,666.67		$1,333,333.33
		Mizuho Bank, Ltd.		$1,016,666.66		$983,333.34

SECTION 4. CONDITIONS PRECEDENT TO AMENDMENTS.

This Amendment shall become effective on the date (the “Third Amendment Effective Date”) on which each of the following conditions precedent shall have been satisfied (or duly waived by the Administrative Agent, the Extending Lenders and the New Revolving Credit Lender):

4.1 Certain Documents. The Administrative Agent shall have received each of the following, in form and substance reasonably satisfactory to the Administrative Agent:

(i) a counterpart of this Amendment, duly executed by each Loan Party, the Administrative Agent, the Collateral Agent, each L/C Issuer, the Extending Lenders, the Assignor Lenders and the New Revolving Credit Lender;

(ii) such customary resolutions and certificates or other action of Holdings and each Borrower as the Administrative Agent may reasonably require evidencing the authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and such documents and certifications (including, without limitation, incumbency certificates and Organization Documents (to the extent there have been changes thereto since they were last delivered to the Administrative Agent) and, if applicable, good standing certificates) as the Administrative Agent may reasonably require to evidence that Holdings and each Borrower is duly organized or formed, and that each of them is validly existing and, if applicable, in good standing; and

(iii) an executed legal opinion from each of (A) Latham & Watkins LLP, special New York counsel to Holdings and the Borrowers, and (B) Stikeman Elliott LLP, special British Columbia counsel to the Canadian Borrower, in each case, addressed to each Secured Party party hereto, in form and substance reasonably satisfactory to the Administrative Agent.

4.2 PATRIOT Act. The Administrative Agent, the Extending Lenders and the New Revolving Credit Lender shall have received, at least three (3) Business Days prior to the Third Amendment Effective Date, (x) all documentation and other information about Holdings, the Borrowers and the Guarantors as has been reasonably requested in writing at least ten Business Days prior to the Third Amendment Effective Date by the Administrative Agent, the Extending Lenders and the New Revolving Credit Lender that it reasonably determines is required by regulatory authorities under applicable “know your customer” and

 

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anti-money laundering rules and regulations, including without limitation the PATRIOT Act, and that has not been previously provided to the Administrative Agent, the Extending Lenders and the New Revolving Credit Lender and (y) a beneficial ownership certification from each Borrower in accordance with the requirements of 31 C.F.R. § 1010.230, in each case that has been requested in writing at least 10 Business Days prior to the Third Amendment Effective Date.

4.3 Interest, Fees and Expenses. The Borrowers shall have paid (or caused to have been paid) (a) to the applicable Lenders the fees set forth in that certain Engagement Letter, dated as of April 27, 2023, among the Borrowers and the Administrative Agent, and (b) to the Administrative Agent, for the account of each Assignor Lender, all accrued and unpaid interest and fees on such Assignor Lender’s existing Loans and unfunded Commitments immediately prior to the Third Amendment Effective Date.

4.4 Representations and Warranties. The representations and warranties of each Borrower and each other Loan Party contained in Section 5 shall be true and correct in all respects.

4.5 No Event of Default. No Event of Default exists or would result from giving effect to the transactions contemplated by this Amendment, including, without limitation, the Extensions.

4.6 Extending Lender Consents. The Administrative Agent shall have received a Lender Consent duly executed by each of the existing Revolving Credit Lenders that are Extending Lenders, attached hereto as Annex II.

4.7 Responsible Officer’s Certificate. The Administrative Agent shall have received a certificate of a Responsible Officer of the U.S. Borrower certifying that the conditions set forth in Sections 4.4 and 4.5 hereof have been satisfied.

SECTION 5. REPRESENTATIONS AND WARRANTIES.

In order to induce the Extending Lenders and the New Revolving Credit Lender to enter into this Amendment and amend the Credit Agreement in the manner provided herein, Holdings, the Borrowers and the other Loan Parties hereby represent and warrant on and as of the Third Amendment Effective Date (before and after giving effect to this Amendment and the Extensions):

5.1 Existence, Qualification and Power; Compliance with Laws. Holdings, each Borrower, each Subsidiary Guarantor and each of the Restricted Subsidiaries (subject, in the case of clause (c), to the Legal Reservations and Section 5.3)) (a) is a Person duly organized, formed or incorporated, amalgamated or continued, validly existing and in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority to (i) own or lease its assets and carry on its business and (ii) execute and deliver this Amendment and perform its obligations under this Amendment and under the Amended Credit Agreement, (c) is duly qualified and is authorized to do business and in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification and (d) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted; except in each case referred to in clause (a) (other than with respect to the Borrowers), (b)(i), (b)(ii) (other than with respect to the Borrowers), (c) and (d), to the extent that any failure to be so or to have such could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

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5.2 Authorization; No Contravention. The execution and delivery of this Amendment and performance by Holdings, each Borrower and each Subsidiary Guarantor of this Amendment and the Amended Credit Agreement are within such Person’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action and do not (a) contravene the terms of any of such Person’s Organization Documents or (b) violate any Law; except in each case to the extent that such violation could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.3 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution or delivery by, performance by, or enforcement against, Holdings, any Borrower or any Subsidiary Guarantor of this Amendment or any other Loan Document, in each case, except those approvals, consents exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.4 Binding Effect. This Amendment has been duly executed and delivered by Holdings, each Borrower and each Subsidiary Guarantor (to the extent such concept is applicable in the relevant jurisdiction and subject, in each case, to the Legal Reservations and Section 5.3). Subject to the Legal Reservations, this Amendment constitutes, a legal, valid and binding obligation of Holdings, each Borrower and each Subsidiary Guarantor, enforceable against such Person in accordance with its terms.

5.5 Accuracy of Representations and Warranties. The representations and warranties of Holdings, each Borrower and each other Loan Party contained in Article V of the Credit Agreement or any other Loan Document are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the Third Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date, except that for purposes of this Section 5, the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent financial statements furnished pursuant to Sections 6.01(a) and (b) of the Credit Agreement, respectively, prior to the Third Amendment Effective Date.

5.6 No Default or Event of Default. No Default or Event of Default exists or would result immediately after giving effect to the provisions of this Amendment.

SECTION 6. MISCELLANEOUS

6.1 Reference to and Effect on the Loan Documents.

(a) As of the date hereof, each reference in the Amended Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the other Loan Documents to the Credit Agreement (including, without limitation, by means of words like “thereunder”, “thereof” and words of like import), shall mean and be a reference to the Credit Agreement as amended by this Amendment.

(b) Except as expressly amended hereby, all of the terms and provisions of the Credit Agreement and all other Loan Documents are and shall remain in full force and effect and are hereby ratified and confirmed.

 

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(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under the Credit Agreement or any Loan Document, or constitute a waiver or amendment of any other provision of the Credit Agreement or any Loan Document (as amended hereby) except as and to the extent expressly set forth herein.

(d) This Amendment (together with any other document executed in connection herewith) is not intended to be, nor shall it be construed as, a novation of the Credit Agreement or any of the Loan Documents.

6.2 Reaffirmation. Each Loan Party party hereto expressly acknowledges the terms of this Amendment and reaffirms, as of the date hereof and as of the Third Amendment Effective Date, that its guarantee of the Obligations under the applicable Guaranty and its grant of Liens on the Collateral to secure the Obligations pursuant to each Collateral Document to which it is a party, in each case, continues in full force and effect and extends to the obligations of the Loan Parties under the Loan Documents (including the Amended Credit Agreement and including the obligations of the Loan Parties in respect of the Extensions) subject to any limitations set out in the Amended Credit Agreement and any other Loan Document applicable to that Loan Party. Neither the execution, delivery, performance or effectiveness of this Amendment nor the modification of the Credit Agreement effected pursuant hereto: (i) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or (ii) is intended to or will create a registerable Lien or requires that any new filings be made or other action be taken to perfect or to maintain the perfection of such Liens. Each Loan Party, in respect of the Collateral Documents to which it is a party, confirms that at the time of the execution and delivery of such Collateral Documents, it was expressly agreed that the Liens created thereunder were intended to secure the Obligations, as amended, novated, supplemented or restated from time to time. The security under the Collateral Documents as security for the Obligations as amended by this Amendment is thus hereby confirmed.

6.3 Waiver of Notice Period for Extension Request. In accordance with Section 2.19(b) of the Credit Agreement, this Amendment constitutes an Extension Request, and the Administrative Agent, in its capacity as the Extended Loans Agent with respect to the Extensions, hereby agrees to waive the ten Business Day notice period provided for in Section 2.19(b) of the Credit Agreement and deems such notice period satisfied.

6.4 Counterparts; Effectiveness. This Amendment may be executed in one or more counterparts (and by different parties hereto in different counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. The Administrative Agent may also require that any such documents and signatures delivered by telecopier or other electronic transmission be confirmed by a manually-signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by telecopier or other electronic transmission.

6.5 Governing Law, Jurisdiction, Etc.. Sections 10.15, 10.16 and 10.17 of the Credit Agreement are hereby incorporated herein mutatis mutandis.

 

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6.6 Loan Document and Integration. This Amendment is a Loan Document, and together with the other Loan Documents, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

6.7 Headings. Section headings contained in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers and members thereunto duly authorized, as of the date indicated above.

 

 

[Signature Page to Third Amendment to Credit Agreement]

 

[Signature Page to Third Amendment to Credit Agreement]

 

[Signature Page to Third Amendment to Credit Agreement]

 

[Signature Page to Third Amendment to Credit Agreement]

 

[Signature Page to Third Amendment to Credit Agreement]

 

[Signature Page to Third Amendment to Credit Agreement]

[Signature Page to Third Amendment to Credit Agreement]

[Signature Page to Third Amendment to Credit Agreement]

[Signature Page to Third Amendment to Credit Agreement]

ANNEX I

TO THIRD AMENDMENT TO ABL CREDIT AGREEMENT

Revolving Credit Commitments and Pro Rata Shares

 

Revolving Credit Lenders		U.S. Commitment (after giving effect to the Third Amendment to ABL Credit Agreement)				Canadian Commitment (after giving effect to the Third Amendment to ABL Credit Agreement)				Total Commitment (after giving effect to the Third Amendment to ABL Credit Agreement)
Royal Bank of Canada		$	34,516,666.66			$	22,483,333.34			$	57,000,000.00
Canadian Imperial Bank of Commerce		$	50,000,000.00			$	40,000,000.00			$	90,000,000.00
Wells Fargo Bank, N.A.		$	35,000,000.00			$	0.00			$	35,000,000.00
Wells Fargo Capital Finance Corporation Canada		$	0.00			$	20,000,000.00			$	20,000,000.00
Bank of America, N.A.		$	35,000,000.00			$	20,000,000.00			$	55,000,000.00
Santander Bank, N.A.		$	16,333,333.34			$	18,666,666.66			$	35,000,000.00
Barclays Bank PLC		$	11,666,666.66			$	13,333,333.34			$	25,000,000.00
Goldman Sachs Lending Partners LLC		$	6,233,333.34			$	4,266,666.66			$	10,500,000.00
Mizuho Bank, Ltd.		$	7,250,000.00			$	5,250,000.00			$	12,500,000.00
Credit Suisse AG, New York Branch		$	14,000,000.00			$	0.00			$	14,000,000.00
HSBC Bank, National Association		$	30,000,000.00			$	16,000,000.00			$	46,000,000.00
		$	240,000,000.00			$	160,000,000.00			$	400,000,000.00

ANNEX II

TO THIRD AMENDMENT TO ABL CREDIT AGREEMENT

Lender Consents

[ON FILE WITH ADMINISTRATIVE AGENT]

Lender Consent

This Lender Consent (this “Lender Consent”) is referred to in, and is a signature page to, the Third Amendment to ABL Credit Agreement (the “Amendment”), amending that certain ABL Credit Agreement, dated as of April 4, 2019 (as amended by the First Amendment to ABL Credit Agreement, dated as of January 10, 2020, the Second Amendment to ABL Credit Agreement, dated as of December 22, 2021, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time immediately prior to the effectiveness of this Amendment, the “ABL Credit Agreement”), by and among Dynasty Intermediate Co., Inc., a Delaware corporation (“Holdings”), Dynasty Acquisition Co., Inc., a Delaware corporation (the “U.S. Borrower”), Standard Aero Limited Standaero Limitee, a British Columbia limited company (the “Canadian Borrower”), StandardAero Aviation Holdings, Inc., a Delaware corporation (the “U.S. Co-Borrower”), the other Borrowers from time to time party thereto, each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”), each L/C Issuer party thereto and Royal Bank of Canada (“Royal Bank”), as Administrative Agent, Collateral Agent and a L/C Issuer. Capitalized terms used but not defined in this Lender Consent have the meaning assigned to such terms in the Amendment or the ABL Credit Agreement, as applicable.

By executing this Lender Consent, the undersigned institution agrees to the terms of the Amendment and the ABL Credit Agreement as amended thereby.

To be executed by:

Extending Lenders

 

Name of Institution:

 

Executing as an Extending Lender:
By:
		Name:
		Title:

 

For any institution requiring a second signature line:
By:
		Name:
		Title:

[Signature Page to Third Amendment to Credit Agreement]

ANNEX III

TO THIRD AMENDMENT TO ABL CREDIT AGREEMENT

Amended Credit Agreement

[Attached]

EXECUTION VERSION

 

 

 

ABL CREDIT AGREEMENT

DATED AS OF APRIL 4, 2019

(AS AMENDED BY THE FIRST AMENDMENT ON JANUARY 10, 2020, AND AS AMENDED BY

THE SECOND AMENDMENT ON DecemberDECEMBER 22, 2021, AND THE THIRD

AMENDMENT ON MAY 1, 2023)

AMONG

DYNASTY ACQUISITION CO., INC.,

AS U.S. BORROWER,

STANDARD AERO LIMITED STANDAERO LIMITEE,

AS CANADIAN BORROWER,

STANDARDAERO AVIATION HOLDINGS, INC.,

AS U.S. CO-BORROWER,

THE OTHER BORROWERS PARTY HERETO,

DYNASTY INTERMEDIATE CO., INC.,

AS HOLDINGS,

ROYAL BANK OF CANADA,

AS ADMINISTRATIVE AGENT, COLLATERAL AGENT AND A L/C ISSUER,

AND

THE OTHER LENDERS AND L/C ISSUERS PARTY HERETO

 

 

RBC CAPITAL MARKETS, LLC,

BARCLAYS BANK PLC,

JEFFERIES FINANCE LLC,

GOLDMAN SACHS LENDING PARTNERS LLC,

AND

MIZUHO SECURITIES USA LLC,

AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS

AND

CANADIAN IMPERIAL BANK OF COMMERCE

AND

BANK OF AMERICA, N.A.,

AS JOINT BOOKRUNNERS AND CO-DOCUMENTATION AGENTS

 

 

 

TABLE OF CONTENTS

 

				Page
		ARTICLE I
		Definitions and Accounting Terms
Section 1.01		Defined Terms			1
Section 1.02		Other Interpretive Provisions			103116
Section 1.03		Accounting Term			106118
Section 1.04		Rounding			106119
Section 1.05		References to Agreements and Laws			106119
Section 1.06		Times of Day			107119
Section 1.07		Timing of Payment or Performance			107119
Section 1.08		Currency Equivalents Generally			107119
Section 1.09		Letter of Credit Amounts			108120
Section 1.10		Pro Forma Calculations			108121
Section 1.11		Calculation of Baskets			108121
Section 1.12		Borrower Representative			109121
Section 1.13		Joint and Several Liability and Related Matters			109122
Section 1.14		Québec Matters			109122
		ARTICLE II
		The Commitments and Credit Extensions
Section 2.01		The Loans			110123
Section 2.02		Borrowings, Conversions and Continuations of Loans			111123
Section 2.03		Letters of Credit			113126
Section 2.04		[Reserved]			123137
Section 2.05		Prepayments			123137
Section 2.06		Termination or Reduction of Commitments			126140
Section 2.07		Repayment of Loans			127141
Section 2.08		Interest			127141
Section 2.09		Fees			128142
Section 2.10		Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate			128143
Section 2.11		Evidence of Indebtedness			129144
Section 2.12		Payments Generally; Administrative Agent’s Clawback			130144
Section 2.13		Sharing of Payments			132147
Section 2.14		Incremental Facilities			133147
Section 2.15		[Reserved]			135149
Section 2.16		Cash Collateral			135149
Section 2.17		Defaulting Lenders			136151
Section 2.18		[Reserved]			137152
Section 2.19		Extension of Commitments			137152
Section 2.20		[Reserved]			140155
Section 2.21		Additional Alternative Currencies			140155
Section 2.22		Protective Advances			141156
Section 2.23		Reallocation Mechanism			142157
		ARTICLE III
		Taxes, Increased Costs Protection and Illegality
Section 3.01		Taxes			143158
Section 3.02		[Reserved]			147162
Section 3.03		Illegality			147162

Section 3.04		Inability to Determine Rates			148163
Section 3.05		Increased Cost and Reduced Return; Capital Adequacy and Liquidity Requirements			149167
Section 3.06		Funding Losses			150168
Section 3.07		Matters Applicable to All Requests for Compensation			150168
Section 3.08		Replacement of Lenders Under Certain Circumstances			152170
		ARTICLE IV
		Conditions Precedent to Credit Extensions
Section 4.01		Conditions to the Initial Credit Extension on the Closing Date			153171
Section 4.02		Conditions to All Credit Extensions			158176
		ARTICLE V
		Representations and Warranties
Section 5.01		Existence, Qualification and Power; Compliance with Laws			159177
Section 5.02		Authorization; No Contravention			159177
Section 5.03		Governmental Authorization; Other Consents			159177
Section 5.04		Binding Effect			159178
Section 5.05		Financial Statements; No Material Adverse Effect			159178
Section 5.06		Litigation			160178
Section 5.07		Use of Proceeds			160178
Section 5.08		Ownership of Property; Liens			160179
Section 5.09		Environmental Compliance			161179
Section 5.10		Taxes			161179
Section 5.11		Employee Benefit Plans			161180
Section 5.12		Subsidiaries; Capital Stock			163181
Section 5.13		Margin Regulations; Investment Company Act			163181
Section 5.14		Disclosure			163181
Section 5.15		Compliance with Laws			163182
Section 5.16		Intellectual Property; Licenses, Etc.			164182
Section 5.17		Solvency			164182
Section 5.18		Perfection, Etc			164182
Section 5.19		Sanctions; OFAC			165183
Section 5.20		Anti-Corruption Laws			165183
Section 5.21		Borrowing Base Certificate			165183
Section 5.22		Eligible Accounts			166184
Section 5.23		Eligible Inventory			166184
Section 5.24		Designated Engines			166184
		ARTICLE VI
		Affirmative Covenants
Section 6.01		Financial Statements			167185
Section 6.02		Certificates; Other Information			169187
Section 6.03		Notices			172190
Section 6.04		Payment of Taxes			172191
Section 6.05		Preservation of Existence, Etc.			172191
Section 6.06		Maintenance of Properties			173191
Section 6.07		Maintenance of Insurance			173191
Section 6.08		Compliance with Laws			173192
Section 6.09		Books and Records			173192
Section 6.10		Inspection Rights			174192

 

ii

Section 6.11		Use of Proceeds			174192
Section 6.12		Covenant to Guarantee Obligations and Give Security			174193
Section 6.13		Compliance with Environmental Laws			176194
Section 6.14		Further Assurances			176195
Section 6.15		[Reserved]			176195
Section 6.16		Post-Closing Undertakings			176195
Section 6.17		No Change in Line of Business			176195
Section 6.18		Transactions with Affiliates			177195
Section 6.19		Lender Conference Calls			180199
Section 6.20		Aircraft Mortgages			180199
Section 6.21		Eligible Inventory			181200
Section 6.22		Eligible Rental Engines			181200
Section 6.23		Field Examinations; Collateral Appraisals			182201
Section 6.24		Control Accounts; Approved Deposit Accounts			182201
		ARTICLE VII
		Negative Covenants
Section 7.01		Indebtedness			184203
Section 7.02		Limitations on Liens			193212
Section 7.03		Fundamental Changes			193212
Section 7.04		Asset Sales			195214
Section 7.05		Restricted Payments			196215
Section 7.06		Burdensome Agreements			203222
Section 7.07		Accounting Changes			205225
Section 7.08		Financial Covenant			205225
Section 7.09		Holding Company			205226
Section 7.10		Canadian Defined Benefit Pension Plan Covenant			206226
		ARTICLE VIII
		Events of Default and Remedies
Section 8.01		Events of Default			206227
Section 8.02		Remedies Upon Event of Default			209230
Section 8.03		Right to Cure			210230
Section 8.04		Application of Funds			211231
		ARTICLE IX
		Administrative Agent and Other Agents
Section 9.01		Appointment and Authorization of Agents			215236
Section 9.02		Delegation of Duties			217238
Section 9.03		Liability of Agents			217238
Section 9.04		Reliance by Agents			218239
Section 9.05		Notice of Default			219240
Section 9.06		Credit Decision; Disclosure of Information by Agents			219240
Section 9.07		Indemnification of Agents			220241
Section 9.08		Agents in Their Individual Capacities			220241
Section 9.09		Successor Agents			221242
Section 9.10		Administrative Agent May File Proofs of Claim			222243
Section 9.11		Collateral and Guaranty Matters			223244
Section 9.12		Other Agents; Arranger and Managers			224245
Section 9.13		Secured Cash Management Agreements and Secured Hedge Agreements			225246
Section 9.14		Appointment of Supplemental Agents and Incremental Arrangers			225246

 

iii

Section 9.15		Intercreditor Agreement			226247
Section 9.16		Withholding Tax			227248
Section 9.17		Credit Bidding			227248
Section 9.18		Certain ERISA Matters			228249
Section  9.19		Erroneous Payments			250
		ARTICLE X
		Miscellaneous
Section 10.01		Amendments, Etc.			229252
Section 10.02		Notices; Electronic Communications			231254
Section 10.03		No Waiver; Cumulative Remedies; Enforcement			233256
Section 10.04		Expenses			234257
Section 10.05		Indemnification by the U.S. Borrower			235258
Section 10.06		Payments Set Aside			236259
Section 10.07		Successors and Assigns			236260
Section 10.08		Confidentiality			242265
Section 10.09		Setoff			243266
Section 10.10		Interest Rate Limitation			244267
Section 10.11		Counterparts			244267
Section 10.12		Integration; Effectiveness			244268
Section 10.13		Survival of Representations and Warranties			244268
Section 10.14		Severability			245268
Section 10.15		Governing Law; Jurisdiction; Etc.			245269
Section 10.16		Service of Process			246269
Section 10.17		Waiver of Right to Trial by Jury			246270
Section 10.18		Binding Effect			246270
Section 10.19		No Advisory or Fiduciary Responsibility			246270
Section 10.20		Affiliate Activities			247271
Section 10.21		Electronic Execution of Assignments and Certain Other Documents			247271
Section 10.22		USA PATRIOT Act			247271
Section 10.23		Judgment Currency			248272
Section 10.24		Acknowledgement and Consent to Bail-In of EEAAffected Financial Institutions			248272
Section 10.25		Canadian Interest Provisions.			248273
Section 10.26		Canadian Anti-Terrorism Laws			249273
Section 10.27		Joint and Several Liability			249273
Section  10.28		Acknowledgement Regarding Any Supported QFCs			273
		ARTICLE XI
		Co-borrower Arrangements
Section 11.01		Addition of Co-Borrowers			250274
Section 11.02		Status of Co-Borrowers			251276
Section 11.03		Resignation of Co-Borrowers			251276

 

iv

SCHEDULES
1		Guarantors
1.01(a)		Adjustments to Consolidated EBITDA
1.01(b)		Existing Letters of Credit
1.01(d)		Approved Foreign Jurisdictions
1.01(e)		Contracts Prohibiting Subsidiary Guarantees
1.01(f)		Closing Date L/C Issuers and Letter of Credit Sublimits
2.01		Commitments and Pro Rata Shares
4.01(a)(x)		Jurisdictions of Local Counsel Opinions
5.12		Subsidiaries and Other Equity Investments
5.16		Intellectual Property Matters
6.16		Post-Closing Undertakings
7.01		Closing Date Indebtedness
7.02		Closing Date Liens
7.05		Closing Date Investments
10.02		Administrative Agent’s Office, Certain Addresses for Notices
EXHIBITS
Form of
A-1		Committed Loan Notice
A-2		Request for L/C Credit Extension
B		Note
C		Compliance Certificate
D-1		Assignment and Assumption
D-2		Administrative Questionnaire
E-1		Holdings Guaranty
E-2		U.S. Guaranty
E-3		Canadian Guaranty
F-1		U.S. Security Agreement
F-2		Canadian Security Agreement
G		ABL Intercreditor Agreement
H		Intercompany Subordination Agreement
I-1		U.S. Tax Compliance Certificate
I-2		U.S. Tax Compliance Certificate
I-3		U.S. Tax Compliance Certificate
I-4		U.S. Tax Compliance Certificate
J		Optional Prepayment of Loans
K		Form of Co-Borrower Joinder Agreement
L		Perfection Certificate
M		Access Agreement
N		Borrowing Base Certificate
O		Form of Aircraft Mortgage
P		Solvency Certificate

 

i

This ABL CREDIT AGREEMENT is entered into as of April 4, 2019, (as amended by the First Amendment to ABL Credit Agreement, dated as of January 10, 2020, as amended by the Second Amendment to ABL Credit Agreement, dated as of December 22, 2021, as amended by the Third Amendment to ABL Credit Agreement, dated as of May 1, 2023, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time), among Dynasty Intermediate Co., Inc., a Delaware corporation (“Holdings”), Dynasty Acquisition Co., Inc., a Delaware corporation (the “U.S. Borrower”), Standard Aero limitedLimited Standaero Limitee, a British Columbia limited company (the “Canadian Borrower”), StandardAero Aviation Holdings, Inc., a Delaware corporation (the “U.S. Co-Borrower”), the other Borrowers from time to time party hereto, each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), each L/C Issuer party hereto and Royal Bank of Canada (“Royal Bank”), as Administrative Agent, Collateral Agent and a L/C Issuer.

PRELIMINARY STATEMENTS

Pursuant to the Stock Purchase Agreement, dated December 18, 2018 (together with all exhibits and schedules and other attachments thereto, collectively, as amended, restated, supplemented or otherwise modified in accordance with the terms thereof and in accordance with Section 4.01(g) of this Agreement, including by that certain Amendment No. 1 to Purchase Agreement and Company Disclosure Letter, dated as of April 2, 2019, the “Acquisition Agreement”), by and among VCSA Holdings LLC, a Delaware limited liability company (“Holdings LLC”), as a seller and in its capacity as the sellers representative, the Specified Management Sellers (as defined therein) (together with Holdings LLC, the “Sellers”), StandardAero Holding Corp., a Delaware corporation (the “Company”), and the U.S. Borrower, the U.S. Borrower will, directly or indirectly, acquire (the “Acquisition”), directly or indirectly and through one or more separate acquisitions, all of the equity interests of the Company.

In connection with the transactions contemplated by the Acquisition Agreement, (a) the U.S. Borrower has requested that, upon the satisfaction (or waiver by the Arrangers) in full of the conditions precedent set forth in the applicable provisions of Article IV below, the applicable Lenders extend credit in the form of U.S. Revolving Credit Loans to the U.S. Borrower at any time and from time to time prior to the Maturity Date, in an aggregate principal amount not in excess of $100,000,000, a portion of which may be drawn on the Closing Date (other than the deemed issuance of Existing Letters of Credit) and (b) the Canadian Borrower has requested that upon the satisfaction (or waiver by the Arrangers) in full of the conditions precedent set forth in the applicable provisions of Article IV below, the applicable Lenders extend credit in the form of Canadian Revolving Credit Loans at any time and from time to time prior to the Maturity Date, in an aggregate principal amount not in excess of $200,000,000, in each case on the terms and subject to the conditions set forth in this Agreement.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

Definitions and Accounting Terms

Section 1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“2020 Increase Effective Date” has the meaning specified in the First Amendment. “2020 Revolving Credit Commitment Increase” means the “2020 Revolving Credit Commitment Increase” as defined in the First Amendment.

“ABL Intercreditor Agreement” means the ABL Intercreditor Agreement substantially in the form of Exhibit G among the Administrative Agent and the Fixed Asset Representative, with such modifications thereto as the Administrative Agent may reasonably agree. On the Closing Date, the Administrative Agent will enter into the ABL Intercreditor Agreement among the Fixed Asset Representative and the other parties thereto.

“ABL Priority Collateral” has the meaning given to such term in the ABL Intercreditor Agreement.

“Acceleration” has the meaning specified in Section 8.01(e).

“Access Agreement” means an Access Agreement, substantially in the form of Exhibit M, or such other form as may reasonably be acceptable to the Administrative Agent.

“Account” means “accounts” as defined in the UCC and in the PPSA and also means a right to payment of a monetary obligation, whether or not earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered or (c) arising out of the use of a credit or charge card or information contained on or for use with the card. Notwithstanding the foregoing, “Account” does not include (i) rights to payment evidenced by chattel paper or an instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv) investment property or (v) letter of credit rights or letters of credit.

“Account Debtor” means any Person obligated on an Account.

“Acquired Eligible Account” has the meaning specified in the definition of “Borrowing Base”.

“Acquired Eligible Assets Cap” has the meaning specified in the definition of “Borrowing Base”.

“Acquired Eligible Parts Inventory” has the meaning specified in the definition of “Borrowing Base”.

“Acquired Eligible Rental Engines” has the meaning specified in the definition of “Borrowing Base”.

“Acquired Eligible WIP Inventory” has the meaning specified in the definition of “Borrowing Base”.

“Acquired Indebtedness” means, with respect to any specified Person, (a) Indebtedness of any other Person existing at the time such other Person is merged, amalgamated or consolidated with or into or becomes a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is Incurred in connection with, or in contemplation of, such other Person merging, amalgamating or consolidating with or into, or becoming a Restricted Subsidiary of, such specified Person and (b) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Acquisition” has the meaning specified in the Preliminary Statements of this Agreement.

 

2

“Acquisition Agreement” has the meaning specified in the Preliminary Statements of this Agreement.

“Acquisition Agreement Representations” means the representations and warranties made by the Sellers or the Company, in each case, with respect to the Company and its subsidiaries in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that the U.S. Borrower or any of its Affiliates has the right (taking into account any applicable grace periods or cure provisions) to terminate the obligations of the U.S. Borrower or any of its Affiliates, or the right to decline to consummate the Acquisition, under the Acquisition Agreement as a result of a breach of one or more of such representations and warranties in the Acquisition Agreement.

“Adjusted Cash” means the amount of unrestricted cash after giving effect to unrealized gains and losses under (and as determined by) any currency Swap Contracts in place at the time of determination (but only with respect to the then-elapsed portion of the current monthly or quarterly (as applicable under the relevant currency Swap Contract) calculation period thereunder).

“Adjusted EURIBOR Rate” means, with respect to any EURIBOR Rate Borrowing for any Interest Period, an interest rate per annum equal to the EURIBOR Rate for such Interest Period, multiplied by the Statutory Reserve Rate; provided that, if the Adjusted EURIBOR Rate as so determined would be less than 0.00% per annum, such rate shall be deemed to be 0.00% per annum for the purposes of this Agreement.”

“Adjusted Eurocurrency Rate” means, with respect to any Eurocurrency Rate Borrowing for any Interest Period, an interest rate per annum equal to the Eurocurrency Rate for such Interest Period, multiplied by the Statutory Reserve Rate; provided that, if the Adjusted Eurocurrency Rate as so determined would be less than 0.00% per annum, such rate shall be deemed to be 0.00% per annum for the purposes of this Agreement.

“Adjusted EurocurrencyTerm SOFR Rate” means, with respect to any EurocurrencyTerm SOFR Rate BorrowingLoan for any Interest Period, an interest rate per annum equal to (a) the EurocurrencyTerm SOFR Rate for such Interest Period, multiplied by the Statutory Reserve Rate plus (b) the Term SOFR Adjustment for such Interest Period; provided that, if the Adjusted EurocurrencyTerm SOFR Rate as so determined would be less than 0.00% per annum, such rate shall be deemed to be 0.00% per annum for the purposes of this Agreement.

“Administrative Agent” means Royal Bank, acting through such of its Affiliates or branches as it may designate, in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent permitted by the terms hereof.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 or such other address or account as the Administrative Agent may from time to time notify the Borrower Representative and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit D-2 or any other form approved by the Administrative Agent.

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

 

3

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this Agreement and the other Loan Documents, Jefferies LLC and its Affiliates shall be deemed to be Affiliates of Jefferies Finance LLC and its Affiliates.

“Affiliate Transaction” has the meaning specified in Section 6.18(a).

“Agent-Related Distress Event” means, with respect to the Administrative Agent, the Collateral Agent or any Person that directly or indirectly controls the Administrative Agent or Collateral Agent (each, a “Distressed Agent-Related Person”), a voluntary or involuntary case with respect to such Distressed Agent-Related Person under any Debtor Relief Law is commenced, or a custodian, conservator, receiver or similar official is appointed for such Distressed Agent-Related Person or any substantial part of such Distressed Agent-Related Person’s assets, or such Distressed Agent-Related Person makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Distressed Agent-Related Person to be, insolvent or bankrupt; provided, that an Agent-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any Equity Interests in the Administrative Agent, the Collateral Agent or any Person that directly or indirectly controls the Administrative Agent by a Governmental Authority or an instrumentality thereof, so long as such ownership interest does not result in or provide the Administrative Agent or Collateral Agent with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit the Administrative Agent or Collateral Agent (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made with the Administrative Agent or the Collateral Agent.

“Agent-Related Persons” means each Agent, together with its Related Parties.

“Agents” means, collectively, the Administrative Agent, the Collateral Agent, the Arrangers, the Incremental Arrangers and the Supplemental Agents (if any).

“Aggregate Borrowing Base” means (a) the U.S. Borrowing Base plus (b) the Canadian Borrowing Base.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this ABL credit agreement.

“Agreement Currency” has the meaning specified in Section 10.23.

“Aircraft” means any “aircraft” as defined in Section 40102 of the Federal Aviation Act.

“Aircraft Mortgage” means an engine security agreement substantially in the form of Exhibit O hereto.

“Aircraft Mortgage Supplement” means each “Engine Security Agreement Supplement”, as defined in the applicable Aircraft Mortgage.

“Alternative Benchmark Rate” has the meaning specified in Section 3.04(d).

 

4

“Alternative Currency” means (a) Euros, Pounds Sterling and Canadian Dollars and (b) subject to Section 2.21, any other currency.

“Anti-Corruption Laws” has the meaning specified in Section 5.20.

“Anticipated Cure Deadline” has the meaning specified in Section 8.03(a).

“Applicable Commitment Fee” means a percentage per annum equal to (a) from the Closing Date until the first Business Day that immediately follows the date on which a Borrowing Base Certificate is delivered pursuant to Section 6.02(h) in respect of the earlier of (i) the first full fiscal quarter ending after the Closing Date or (ii) the first full month ending after the Closing Date, if the U.S. Borrower delivers a certificate of a Responsible Officer specifying the average daily Excess Availability during the most recently completed month which shall be deemed to be the Average Excess Availability for the purposes of this definition, 0.375% per annum, and (b) thereafter, the applicable percentage per annum set forth below, as determined by reference to the Average Excess Availability:

 

Applicable Commitment Fee
Pricing Level		Average Excess Availability		Applicable Commitment Fee
1		Less than 50% of the Loan Cap		0.250%
2		Equal to or greater than 50% of the Loan Cap		0.375%

Any increase or decrease in the Applicable Commitment Fee resulting from a change in the Average Excess Availability shall become effective as of the first Business Day immediately following the date the applicable Borrowing Base Certificate is delivered pursuant to Section 6.02(h); provided, however, that “Pricing Level 2” shall apply without regard to the Average Excess Availability (x) at any time after the date on which any Borrowing Base Certificate was required to have been delivered pursuant to Section 6.02(h) but was not delivered, commencing with the first Business Day immediately following such date and continuing until the first Business Day immediately following the date on which such Borrowing Base Certificate is delivered, or (y) at the election of the Majority Lenders under the applicable Tranche at such time, at all times if an Event of Default shall have occurred and be continuing.

“Applicable Jurisdiction” means the United States, Canada and any other jurisdiction approved by the Revolving Credit Lenders of the applicable Tranche and the Administrative Agent, in each case, acting reasonably and in good faith.

“Applicable Percentage” means, for any Revolving Credit Lender:

(a) with respect to payments, computations and other matters relating to the U.S. Commitment or U.S. Revolving Credit Loans or U.S. L/C Exposure, a percentage equal to a fraction, the numerator of which is (i) the U.S. Commitment of such Revolving Credit Lender and the denominator of which is (ii) the aggregate U.S. Commitment of all the U.S. Revolving Credit Lenders (or, if the aggregate U.S. Commitment has terminated or expired, the Applicable Percentage shall be determined based upon such Revolving Credit Lender’s share of the aggregate U.S. Revolving Exposure);

(b) with respect to payments, computations and other matters relating to the Canadian Commitment or Canadian Revolving Credit Loans or Canadian L/C Exposure, a percentage equal to a fraction, the numerator of which is (i) the Canadian Commitment of such Revolving Credit Lender and the denominator of which is (ii) the aggregate Canadian Commitment of all the Canadian Revolving Credit Lenders (or, if the aggregate Canadian Commitment has terminated or expired, the Applicable Percentage shall be determined based upon such Revolving Credit Lender’s share of the aggregate Canadian Revolving Exposure); and

 

5

(c) with respect to payments, computations and other matters relating to the Commitment generally, a percentage equal to a fraction, the numerator of which is (i) the aggregate Commitment of such Revolving Credit Lender and the denominator of which is (ii) the aggregate Commitment of all the Revolving Credit Lenders (or, if the aggregate Commitment has terminated or expired, the Applicable Percentage shall be determined based upon such Revolving Credit Lender’s share of the aggregate Revolving Exposure);

provided, that when a Defaulting Lender shall exist, any such Defaulting Lender’s Commitment shall be disregarded in any of such calculations to the extent that disregarding the applicable Commitments would not cause the Credit Exposure of any Lender under any Facility to exceed the amount of such Lender’s Commitment under such Facility.

“Applicable Rate” means, for any day, with respect to any Base Rate Loan, EurocurrencyTerm Benchmark Rate Loan, RFR Loan, Canadian Base Rate Loan, Canadian Prime Rate Loan or BA Equivalent Loan, as the case may be, a percentage per annum equal to (a) from the Closing Date until the first Business Day that immediately follows the date on which a Borrowing Base Certificate is delivered pursuant to Section 6.02(h) in respect of the earlier of (i) the first full fiscal quarter ending after the Closing Date or (ii) the first full month ending after the Closing Date, if the U.S. Borrower delivers a certificate of a Responsible Officer specifying the average daily Excess Availability during the most recently completed month which shall be deemed to be the Average Excess Availability for the purposes of this definition, “Pricing Level 1” below, and (b) thereafter, the applicable rate per annum set forth below based upon the daily average Excess Availability during the most recently completed fiscal quarter of the U.S. Borrower (the “Average Excess Availability”):

 

Applicable Rate
Pricing Level		Average Excess Availability (% of Loan Cap)		Eurocurrency Term Benchmark Rate Loans and RFR Loans		Base Rate Loans		Canadian Base Rate Loans		Canadian Prime Rate Loans		BA Equivalent Loans
1		< 33% of Loan Cap		2.00%		1.00%		1.00%		1.00%		2.00%
12		<• 33% of Loan Cap but < 66% of Loan Cap		1.75%		0.75%		0.75%		0.75%		1.75%
23		• 33% of Loan Cap but < 66% of Loan Cap		1.50%		0.50%		0.50%		0.50%		1.50%
3		• 66% of Loan Cap		1.25%		0.25%		0.25%		0.25%		1.25%

Any increase or decrease in the Applicable Rate resulting from a change in the Average Excess Availability shall become effective as of the first Business Day immediately following the date the applicable Borrowing Base Certificate is delivered pursuant to Section 6.02(h); provided, however, that “Pricing Level 1” shall apply without regard to the Average Excess Availability (x) at any time after the date on which any Borrowing Base Certificate was required to have been delivered pursuant to Section 6.02(h) but was not delivered, commencing with the first Business Day immediately following such date and continuing until the first Business Day immediately following the date on which such Borrowing Base Certificate is delivered, or (y) at the election of the Majority Lenders under the applicable Tranche at such time, at all times if an Event of Default shall have occurred and be continuing.

 

6

“Applicable Threshold” means on any date of determination, the amount equal to the greater of (a) 10% of the Loan Cap and (b) $30,000,000.

“Appropriate Lender” means, at any time, (a) with respect to the Revolving Credit Facility, a Lender that has a Commitment with respect to the Revolving Credit Facility or holds a Revolving Credit Loan at such time and (b) with respect to the Letter of Credit Sublimit, (i) each L/C Issuer and (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a), the applicable Revolving Credit Lenders.

“Approved Deposit Account” means a Deposit Account that is the subject of an effective Deposit Account Control Agreement and that is maintained by any Loan Party with a Deposit Account Bank. “Approved Deposit Account” includes all monies on deposit in a Deposit Account and all certificates and instruments, if any, representing or evidencing such Deposit Account.

“Approved Electronic Communication” means any notice, demand, communication, information, document or other material that any Loan Party provides to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Agents or the Lenders by means of electronic communications pursuant to Section 10.02(b).

“Approved Foreign Jurisdiction” means the jurisdictions set forth on Schedule 1.01(d) as such schedule may be amended with the consent of the Administrative Agent in its Permitted Discretion.

“Approved Fund” means any Fund that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender and controls such Lender.

“Approved Securities Intermediary” means a “securities intermediary” or “commodity intermediary” (as such terms are defined in the UCC) selected or approved by the Administrative Agent (such approval not to be unreasonably withheld); it being understood and agreed that the “securities intermediaries” and “commodities intermediaries” of the Loan Parties on the Closing Date are Approved Securities Intermediaries.

“Arrangers” means each of (a) RBC Capital Markets, LLC, Barclays Bank PLC, Jefferies Finance LLC, Goldman Sachs Lending Partners LLC and Mizuho Securities USA LLC, in their respective capacities as exclusive joint lead arrangers and bookrunners, and(b) Canadian Imperial Bank of Commerce and Bank of America, N.A., in their respective capacities as joint bookrunners, and (c) the Co-Documentation Agents.

“Asset Sale” means:

(a) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets of any Borrower Party, or

(b) the issuance or sale of Equity Interests (other than Preferred Stock and Disqualified Stock of Restricted Subsidiaries issued in compliance with Section 7.01 and directors’ qualifying shares or shares or interests required to be held by foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary of the U.S. Borrower (other than to any Borrower or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions) (each of the foregoing referred to in this definition as a “Disposition”; the term “Dispose” as a verb has a corresponding meaning).

 

7

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

(a) a sale, exchange or other disposition of cash, Cash Equivalents or Investment Grade Securities, or of obsolete, damaged, unnecessary, unsuitable or worn out equipment or other assets in the ordinary course of business, or dispositions of property no longer used, useful or economically practicable to maintain in the conduct of the business of the Borrower Parties (including allowing any registrations or any applications for registration of any intellectual property or other intellectual property rights to lapse or become abandoned, or otherwise disposing of any intellectual property rights);

(b) any Disposition in compliance with Section 7.03 other than any provision of Section 7.03 that permits dispositions permitted under this Agreement (including under Section 7.04);

(c) any Restricted Payment that is permitted to be made, and is made, pursuant to Section 7.05 (including pursuant to any exceptions provided for in the definition of “Restricted Payment”) or any Permitted Investment;

(d) other than in connection with the determination of Leverage Excess Proceeds, any Disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary, in a single transaction or series of related transactions, with an aggregate Fair Market Value of less than or equal to $40,000,000;

(e) any transfer or Disposition of property or assets or issuance or sale of Equity Interests by a Restricted Subsidiary to the U.S. Borrower or by the U.S. Borrower or a Restricted Subsidiary to another Restricted Subsidiary;

(f) the creation of any Lien permitted under this Agreement;

(g) any issuance, sale, pledge or other disposition of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(h) the sale, lease, assignment, license or sublease of inventory, equipment, accounts receivable, notes receivable or other current assets held for sale in the ordinary course of business or the conversion of accounts receivable and related assets to notes receivable or dispositions of accounts receivable and related assets in connection with the collection or compromise thereof;

(i) the lease, assignment, license, sublicense or sublease of any real or personal property in the ordinary course of business;

(j) a sale, assignment or other transfer of Receivables Assets, or participations therein, and related assets (i) to a Receivables Subsidiary in a Qualified Receivables Financing or (ii) to any other Person in a Qualified Receivables Factoring;

(k) a sale, assignment or other transfer of Receivables Assets, or participations therein, and related assets by a Receivables Subsidiary in a Qualified Receivables Financing;

(l) any exchange of assets for Related Business Assets (including a combination of Related Business Assets and a de minimis amount of cash or Cash Equivalents) of comparable or greater market value than the assets exchanged, as determined in good faith by the U.S. Borrower;

 

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(m) (i) non-exclusive licenses, sublicenses or cross-licenses of intellectual property, other intellectual property rights or other general intangibles and (ii) exclusive licenses, sublicenses or cross-licenses of intellectual property, other intellectual property rights or other general intangibles in the ordinary course of business of the Borrower Parties;

(n) any transfer in a Sale/Leaseback Transaction of any property acquired or built after the Closing Date; provided that such sale is for at least Fair Market Value (as determined on the date on which a definitive agreement for such Sale/Leaseback Transaction was entered into);

(o) the surrender or waiver of obligations of trade creditors or customers or other contract rights that were incurred in the ordinary course of business of any Borrower Party, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer or compromise, settlement, release or surrender of a contract, tort or other litigation claim, arbitration or other disputes;

(p) Dispositions arising from foreclosures, condemnations, eminent domain, seizure, nationalization or any similar action with respect to assets, dispositions of property subject to casualty events;

(q) Dispositions of Investments (including Equity Interests) in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements or rights of first refusal between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(r) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(s) the issuance of directors’ qualifying shares and shares issued to foreign nationals to the extent required by applicable law;

(t) Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property that is purchased within 90 days of such disposition or (ii) the proceeds of such Asset Sale are applied within 90 days of such disposition to the purchase price of such replacement property (which replacement property is purchased within 90 days of such disposition);

(u) a sale or transfer of equipment receivables, or participations therein, and related assets;

(v) any Dispositions in connection with the Transactions;

(w) (i) the Disposition of assets acquired pursuant to any Permitted Investment, which assets are not used or useful to the core or principal business of the Borrower Parties; and (ii) the Disposition of assets that are necessary or advisable, in the good faith judgment of the U.S. Borrower, in order to obtain the approval of any Governmental Authority to consummate or avoid the prohibition or other restrictions on the consummation of any Permitted Investment or acquisition; and

(x) any Dispositions made in connection with the Permitted Canadian Transaction.

For the avoidance of doubt, the unwinding of Swap Contracts shall not be deemed to constitute an Asset Sale.

 

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“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit D-1, or otherwise in form and substance reasonably acceptable to the Administrative Agent.

“Auto-Renewal Letter of Credit” has the meaning specified in Section 2.03(c)(iii).

“Availability” means, at any time, an amount equal to (a) the Loan Cap minus (b) the Total Outstandings at such time.

“Availability Period” means the period from and including the Closing Date to but excluding the earlier of the Maturity Date and the date of termination in full of the Commitments.

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determiningthe length of an Interest Period pursuant to this Agreement as of such date.

“Average Excess Availability” has the meaning specified in the definition of “Applicable Rate”.

“Aviation Authority” means any Governmental Authority in respect of the regulation of commercial aviation, air navigation or the registration, airworthiness or operation of civil aircraft and having jurisdiction over the Borrowers or the relevant Permitted Lessee, as applicable, including, if applicable, the TCCA, the Canadian Transportation Agency, the FAA, the U.S. Department of Transportation, the Civil Aviation Authority (UK) or Airport Coordinated Limited.

“BA Equivalent Loan” means any Canadian Revolving Credit Loan in Cdn.$ bearing interest at a rate determined by reference to the BA Rate in accordance with the provisions of Article II.

“BA Rate” means, for the Interest Period of each BA Equivalent Loan, theon any day, the annual rate of interest per annumwhich is equal to the average annual ratesof the yield rates per annum (calculated on the basis of a year of 365 days) applicable to Cdn.$ bankers’ acceptances having an, where applicable, identical orissue and comparable term to such Interest Periodmaturity dates as the bankers’ acceptances proposed to be issued by the Borrower displayed and identified as such on the display referred to as the “Reuters screen “CDOR Page” (or any display substituted therefor) of Reuters Monitor Money Rates Service asRefinitiv Benchmark Services (UK) Limited, at approximately 11:00 a.m10:00 a.m. (Toronto time) on the first day of such Interest Period, that day or, if that day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Administrative Agent after 10:00 a.m. (Toronto time) to reflect any error in a posted rate of interest or in the posted average annual rate of interest); provided that, however, if suchthose rates do not appear on thethat CDOR Page at such time on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of 1/100 of 1%) as of 11:00 a.m. on such day at which, then the BA Rate shall be the rate (expressed as a rate per annum on the basis of a year of 365 day) determined by the Administrative Agent is then offering to purchase Cdn.$as being its rate of interest for bankers’ acceptances accepted by it having an identical term to such Interest Period (or a term as closely as possible comparable to such term)in Cdn.$ for a face amount similar to the amount of the applicable BA Rate based loan and for a term similar to the applicable Interest Period. Each determination of the BA Rate by the Administrative Agent shall be conclusive and binding, absent manifest error. Notwithstanding any provision to the contrary in this Agreement, the applicable BA Rate shall at no time be less than 0.00% per annum.

 

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If at any time the Administrative Agent reasonably determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in Section 3.04(b) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in Section 3.04(b) have not arisen but the supervisor or the administrator of the CDOR or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the CDOR shall no longer be used for determining interest rates for loans in Canadian Dollars (or any other currency, as applicable), then the Administrative Agent and Holdings shall endeavor to establish an alternate benchmark floating term rate of interest to the BA Rate that is generally accepted as the then prevailing market convention for determining a rate of interest for similar syndicated loans denominated in Canadian Dollars at such time and shall include the spread or method for determining a spread or other adjustments or modifications that are generally accepted as the then prevailing market convention for determining such spread, method, adjustment or modification, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable. Notwithstanding anything to the contrary herein, such amendment shall become effective without any further action or consent of any other party to this Agreement; provided that if there is not a generally accepted prevailing market convention for determining a rate of interest for similar syndicated loans denominated in Canadian Dollars, then Holdings and the Administrative Agent may establish an alternate benchmark floating term rate of interest, which may include a spread or method for determining a spread or other adjustments or modifications, and such alternate rate of interest shall become effective within five Business Days of the date that notice of such alternate rate of interest is provided to the Lenders unless prior to the end of such five Business Day period the Administrative Agent receives a written notice from the Required Lenders of each Tranche of Canadian Revolving Credit Loans stating that such Required Lenders object to such alternate rate of interest. For the avoidance of doubt, if any such alternate rate of interest determined pursuant to this paragraph would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

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

“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule. and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bank of Canada Overnight Rate” means, on any date of determination, the rate of interest charged by the Bank of Canada on one-day Canadian dollar loans to financial institutions, for such date.

“Base Rate” means, for any day, for purposes of determining interest rates on Dollar denominated loans made in the U.S. a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate on such day plus 1/2 of 1.00%, (b) the Prime Lending Rate on such day and (c) the Adjusted Eurocurrency Rate published on such day (or if such day is not a Business Day the next previous Business Day) for an Interest Period of one month plus 1.00%; provided that for the purpose of clause

 

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(c), the Adjusted Eurocurrency Rate for any day shall be based on the rate determined on such day at approximately 11:00 a.m. (London time) by reference to the Screen Rate, as if the relevant Borrowing of Base Rate Loans were a Eurocurrency Rate BorrowingTerm SOFR Rate for a one-month tenor in effect on such day plus 1.00%. If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Base Rate shall be determined without regard to clause (a) above until the circumstances giving rise to such inability no longer exist. For the avoidance of doubt, the applicable Base Rate shall at no time be less than 0.00% per annum.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Benchmark” means, initially, the Term SOFR Rate, as applicable; provided that if a Benchmark Trigger Event has occurred with respect to any then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement Rate to the extent that such Benchmark Replacement Rate has replaced such prior benchmark rate pursuant to Section 3.04.

“Benchmark Replacement Adjustment” means, with respect to any replacement of any then-current Benchmark with an Unadjusted Benchmark Replacement for each applicable Interest Period (to the extent an Interest Period remains applicable, otherwise, such other period and Available Tenor), the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Holdings and the Administrative Agent giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body, (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities of the applicable currency at such time and (iii) the making of appropriate adjustments to (a) preserve pricing in effect at the time of selection of such Benchmark Replacement Rate and (b) for the duration and time for determination of the Benchmark Replacement Rate in relation to any applicable

Interest Period.

“Benchmark Replacement Amendment” has the meaning specified in Section 3.04(c).

“Benchmark Replacement Conforming Changes” means, with respect to the Term SOFR Rate or any proposed Benchmark Replacement Rate, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent in consultation with Holdings determines may be appropriate to reflect the adoption and implementation of the Term SOFR Rate or such Benchmark Replacement Rate and the other provisions contemplated by Section 3.04 (provided that any such change that is not substantially consistent with both (x) market practice and (y) other syndicated credit facilities for similarly situated sponsors denominated in Dollars for which Royal Bank of Canada acts as administrative agent shall be determined by the Administrative Agent in consultation with Holdings), and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with both (x) market practice and (y) other syndicated credit facilities for similarly situated sponsors denominated in Dollars for which Royal Bank of Canada acts as

 

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administrative agent (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement Rate exists, in such other manner of administration as the Administrative Agent, in consultation with Holdings, determines is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

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

 

(1)

in the case of clause (i)(A) of the definition of “Benchmark Trigger Event,” the date on which the administrator of such Benchmark permanently or indefinitely ceases to provide all Available Tenors of such Benchmark; or

 

(2)

in the case of clause (i)(B) of the definition of “Benchmark Trigger Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark permanently or indefinitely ceases to provide all Available Tenors of such Benchmark.

For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.

“Benchmark Replacement Rate” means the first alternative set forth in the order below that can be determined by the Administrative Agent:

(i) Solely in the case of Loans denominated in Dollars, the sum of (a) the Daily Simple SOFR Rate and (b) the Term SOFR Adjustment; and

(ii) the sum of: (a) the alternate benchmark rate that has been selected by Holdings and the Administrative Agent giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the then-current Benchmark for syndicated credit facilities of the applicable currency and (b) the Benchmark Replacement Adjustment;

provided that if the Benchmark Replacement Rate as so determined pursuant to any clause above would be less than 0.00% per annum, such rate shall be deemed to be 0.00% per annum for the purposes of this Agreement.

Any Benchmark Replacement Rate shall be applied in a manner consistent with market practices; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, such Benchmark Replacement Rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent with the consent of Holdings.

“Benchmark Trigger Event” has the meaning specified in Section 3.04(c).

 

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“Beneficial Owner” has the meaning given to that term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, in each case as in effect on the date hereof, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act, as in effect on the date hereof), such “person” will not be deemed to have beneficial ownership of any securities that such “person” has the right to acquire or vote only upon the happening of any future event or contingency (including the passage of time) that has not yet occurred. The terms “beneficial ownership,” “beneficially owns” and “beneficially owned” have a corresponding meaning.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

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

“BIA” means the Bankruptcy and Insolvency Act (Canada).

“Blockage Notice” means a notice of “control” (as defined in the UCC) or its applicable equivalent contemplated to be delivered pursuant to each Deposit Account Control Agreement.

“Board of Directors” means as to any Person, the board of directors, board of managers, sole member or managing member or other governing body of such Person, or if such Person is owned or managed by a single entity or has a general partner, the board of directors, board of managers, sole member or managing member or other governing body of such entity or general partner, or in each case, any duly authorized committee thereof, and the term “directors” means members of the Board of Directors.

“Bonded Accounts Receivable” means, as to any Borrower, accounts receivable of such Borrower, arising in the ordinary course of business of such Borrower with respect to a contract which requires such Borrower to have a bond posted on its behalf to secure such Borrower’s performance of such contract.

“Borrowers” means, collectively, (i) the U.S. Borrower, (ii) the Canadian Borrower, (iii) StandardAero Aviation Holdings, Inc. and (iv) each Co-Borrower (or, as the context requires, any one of them). In the event that a Borrower consummates any merger, amalgamation or consolidation in accordance with Section 7.03, the surviving Person in such merger, amalgamation or consolidation shall be deemed to be a “Borrower” for all purposes of this Agreement and the other Loan Documents.

“Borrower Amalco” means Standard Aero Limited Standaero Limitee, the company resulting from the Initial Amalgamation.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrower Parties” means the collective reference to the U.S. Borrower and its Restricted Subsidiaries, and “Borrower Party” means any one of them.

“Borrower Representative” means the entity appointed to act on behalf of the Borrowers pursuant to Section 1.12.

“Borrowing” means a Revolving Credit Borrowing.

 

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“Borrowing Base” means, individually and collectively as the context may require, the U.S. Borrowing Base and the Canadian Borrowing Base.

Notwithstanding the foregoing, in the event that the Borrowers shall have used commercially reasonable efforts to complete and deliver a field examination and an appraisal from an examiner and appraiser reasonably satisfactory to the Administrative Agent prior to the Closing Date and one or both of such items cannot be completed and delivered on or before the Closing Date, for the period from the Closing Date until the date that is 90 days following the Closing Date (or such earlier date as the Borrowers may elect after delivery of a field examination and appraisal in form and substance reasonably satisfactory to the Administrative Agent, or such later date as may be agreed to by the Administrative Agent), the Borrowers shall be deemed to have a Borrowing Base equal to $225,000,000 (the “Borrowing Base Floor”). The Borrowing Base Floor shall remain effective until the earlier of (i) the delivery of the first Borrowing Base Certificate after the Closing Date and (ii) the date that is 90 days following the Closing Date; provided, that in the event that the Borrowers do not deliver or cause to be delivered an initial field examination and an initial appraisal that are in form and substance reasonably satisfactory to the Administrative Agent by the date that is 90 days following the Closing Date (subject to extension as agreed to by the Administrative Agent in its reasonable discretion), on the date that is 90 days following the Closing Date (or such later date) each Borrowing Base shall be reduced to zero and shall not be increased until such date as the Borrowers have delivered to the Administrative Agent such a reasonably satisfactory field examination and appraisal.

In connection with (x) any Account, Inventory and/or Designated Engines of PAS Technologies Inc., a Delaware corporation (“PAS Technologies”), Jet Aviation Specialists, LLC, a Florida limited liability company (“Jet Aviation”), and/or Dallas Airmotive, Inc., a Texas corporation (“Dallas Airmotive”), and (y) the acquisition of any Account, Inventory and/or Designated Engines pursuant to any Investment permitted hereunder after the Closing Date, in each case, that the Borrowers seek to have deemed Eligible Account, Eligible Parts Inventory, Eligible Rental Engines and/or Eligible WIP Inventory for purposes of the Borrowing Base, the Borrowers shall submit a Borrowing Base Certificate reflecting a calculation of the applicable Borrowing Base that includes any Eligible Account, Eligible Parts Inventory, Eligible Rental Engines and Eligible WIP Inventory of PAS Technologies, Jet Aviation or Dallas Airmotive or acquired in connection with such Investment (the “Acquired Eligible Account”, the “Acquired Eligible Parts Inventory”, the “Acquired Eligible Rental Engines” and the “Acquired Eligible WIP Inventory”, respectively) and, from and after, in the case of clause (x) above, the Third Amendment Effective Date, and in the case of clause (y) above, the Investment Date, the applicable Borrowing Base hereunder shall be calculated giving effect thereto; provided that, prior to the completion of a field examination and inventory appraisal with respect to such Acquired Eligible Account, Acquired Eligible Parts Inventory, Acquired Eligible Rental Engines and Acquired Eligible WIP Inventory, such adjustment to the applicable Borrowing Base shall only be available if an audit with respect to such assets reasonably satisfactory to the Administrative Agent in its Permitted Discretion has been completed and shall be limited from, in the case of clause (x) above, the Third Amendment Effective Date until the date that is 90 days after the Third Amendment Effective Date, and in the case of clause (y) above, the date such acquisition is consummated (the “Investment Date”) until the date that is 90 days after the Investment Date, such that the aggregate amount of Acquired Eligible Account, Acquired Eligible Parts Inventory, Acquired Eligible Rental Engines and Acquired Eligible WIP Inventory included in such Borrowing Base prior to the completion of a field examination and inventory appraisal with respect thereto, shall not exceed 10% of such Borrowing Base (calculated after giving effect to the inclusion (up to such 10% cap) of such Acquired Eligible Account, Acquired Eligible Parts Inventory, Acquired Eligible Rental Engines and Acquired Eligible WIP Inventory as to which a field examination and inventory appraisal has not been performed) (the “Acquired Eligible Assets Cap”). From the 91^st day following the Third

 

15

Amendment Effective Date or the Investment Date, as applicable, until the 180^th day following the Third Amendment Effective Date or the Investment Date, as applicable, subject to the Acquired Eligible Assets Cap, the Acquired Eligible Accounts, Acquired Eligible Parts Inventory, Acquired Eligible Rental Engines and Acquired Eligible WIP Inventory may be included in the Borrowing Base prior to the completion of a field examination and inventory appraisal with respect thereto but after the audit referred to in the previous sentence, at advance rates equal to 50% of the applicable advance rates specified therefor in the definitions of “U.S. Borrowing Base” and “Canadian Borrowing Base”, as applicable. From the 181^st day following the Third Amendment Effective Date or the Investment Date, as applicable, the applicable Borrowing Base shall be calculated without reference to the Acquired Eligible Account, Acquired Eligible Parts Inventory, Acquired Eligible Rental Engines and Acquired Eligible WIP Inventory until a field examination and inventory appraisal has been completed with respect to such assets; it being understood and agreed that (a) there shall be no Default or Event of Default solely as a result of a failure to complete and deliver such inventory appraisal and field examination on or prior to the dates indicated above and (b) following the completion of such field examination and inventory appraisal, the Borrowers may deliver an updated Borrowing Base Certificate reflecting the inclusion of such Acquired Eligible Account, Acquired Eligible Parts Inventory, Acquired Eligible Rental Engines and Acquired Eligible WIP Inventory.

“Borrowing Base Certificate” means a certificate, in substantially the form of Exhibit N hereto, or otherwise in form and substance reasonably satisfactory to the Administrative Agent.

“Borrowing Base Floor” has the meaning specified in the definition of “Borrowing Base”.

“Business Day”:

(a) means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York City or Toronto, Ontario, Canada;

(b) with respect to any Term SOFR Rate Loan, if such day relates to notices and determinations in respect of the Term SOFR Rate or any Term SOFR Rate Loan or any funding, conversion, continuation, Interest Period or payment of any Term SOFR Rate Loan, any such date that is an RFR Business Day;

(c) (b) solely if such day relates to any interest rate settings as to a EurocurrencyEURIBOR Rate Loan denominated in Dollars, means any such day described in clause (a) above that is also a London BankingEuros, any fundings, disbursements, settlements or payments in Euros, or any other dealings in Euros to be carried out pursuant to this Agreement in respect of any such EURIBOR Rate Loan, any such day on which the TARGET2 payment system is not open shall not be a “Business Day”;

(c) [reserved];

(d) solely if such day relates to any interest rate settings as to a BA Equivalent Loan denominated in Canadian Dollars, any fundings, disbursements, settlements or payments in Canadian Dollars, or any other dealings in Canadian Dollars to be carried out pursuant to this Agreement in respect of any such BA Equivalent Loan, any such day commercial banks are authorized to close under the Laws of the Province of Ontario, or are in fact closed in Toronto, Ontario shall not be a “Business Day”;

 

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(e) (d) solely if such day relates to any interest rate settings as to an RFR Loan, any fundings, disbursements, settlements or payments in respect of any such RFR Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such RFR Loan, means a day that is an RFR Business Day; and

(f) (e) solely if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in an Alternative Currency other than Euros, any fundings, disbursements, settlements or payments in such Alternative Currency, or any other dealings in such Alternative Currency to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.

“Canadian Anti-Terrorism Laws” means any Canadian law, judgment, order, executive order, decree, ordinance, rule or regulation related to terrorism financing, money laundering or sanctions including Part II.1 of the Criminal Code (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), and regulations promulgated pursuant to the Special Economic Measures Act (Canada), the United Nations Act (Canada) and the Justice for Victims of Corrupt Foreign Officials Act (Canada).

“Canadian Base Rate” means, for any day, a floating rate equal to the annual rate of interest determined by the Administrative Agent which is equal to the greatest of (a) the annual rate of interest announced from time to time by Royal Bank of Canada, as being its reference rate or “base rate” in effect on such date (or if such date is not a Business Day, on the Business Day immediately preceding such date) for determining interest rates on Dollar denominated commercial loans made by it in Canada, in each case regardless of whether such bank actually charges such rate of interest in connection with extensions of credit in Dollars to debtors, (b) the Federal Funds Rate for such day plus one-half of one percent (0.50%) and (c) the Adjusted Eurocurrency Rate published on such day (or if such day is not a Business Day the next previous Business Day) for an Interest Period of one month plus 1.00%; provided that for the purpose of clause (c), the Adjusted Eurocurrency Rate for any day shall be based on the rate determined on such day at approximately 11:00 a.m. (London time) by reference to the Screen Rate, as if the relevant Borrowing of Canadian Base Rate Loans were a Eurocurrency Rate BorrowingTerm SOFR Rate for a one-month tenor in effect on such day plus 1.00%. Each change in any interest rate provided for in the Agreement based upon the Canadian Base Rate shall take effect at the time of such change in the Canadian Base Rate. For the avoidance of doubt, the applicable Canadian Base Rate shall at no time be less than 0.00% per annum.

“Canadian Base Rate Loan” means a Loan or portion thereof made to the Canadian Borrower denominated in Dollars bearing interest at a rate based on the Canadian Base Rate.

“Canadian Borrower” has the meaning specified in the introductory paragraph to this Agreement; provided that, following the Initial Amalgamation, the Canadian Borrower shall mean Borrower Amalco.

“Canadian Borrowing Base” means, at any time of calculation, an amount equal to (but not less than zero):

(a) the sum of (x) product of (A) 85% multiplied by (B) the Eligible Accounts (other than Investment Grade Eligible Accounts) of the Canadian Loan Parties at such time and (y) product of (A) 90% multiplied by (B) the Investment Grade Eligible Accounts of the Canadian Loan Parties at such time (provided that any Eligible Account owing by General Electric Company or any of its Affiliates shall at all times be treated as an Investment Grade Eligible Account for purposes of this clause (a)),

 

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plus

(b) the product of (A) 85% multiplied by (B) the Net Orderly Liquidation Value Percentage of the Eligible Parts Inventory of the Canadian Loan Parties at such time multiplied by (C) Eligible Parts Inventory of the Canadian Loan Parties as identified on the most recent Borrowing Base Certificate,

plus

(c) the product of (A) 85% multiplied by (B) the Net Orderly Liquidation Value Percentage of the Eligible Rental Engines of the Canadian Loan Parties at such time multiplied by (C) Eligible Rental Engines of the Canadian Loan Parties as identified on the most recent Borrowing Base Certificate,

plus

(d) the product of (A) 85% multiplied by (B) the Net Orderly Liquidation Value Percentage of the Eligible WIP Inventory of the Canadian Loan Parties at such time multiplied by (C) Eligible WIP Inventory of the Canadian Loan Parties as identified on the most recent Borrowing Base Certificate,

plus

(e) the product of (A) 100% multiplied by (B) the Eligible Cash of the Canadian Loan Parties as such time,

minus

(f) without duplication, Reserves established by the Collateral Agent in its Permitted Discretion.

“Canadian Collateral” means the Collateral that secures the Canadian Obligations (but not the U.S. Obligations).

“Canadian Commitment” means, with respect to each Canadian Revolving Credit Lender, the commitment, if any, of such Canadian Revolving Credit Lender to make Canadian Revolving Credit Loans and to acquire participations in Canadian Letters of Credit hereunder, expressed as an amount representing the maximum possible aggregate amount of such Canadian Revolving Credit Lender’s Canadian Revolving Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.06, (b) assignments by or to such Canadian Revolving Credit Lender pursuant to Section 10.07 and (c) Reallocations pursuant to Section 2.23. The initial amount of each Canadian Revolving Credit Lender’s Canadian Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Canadian Revolving Credit Lender shall have assumed its Canadian Commitment, as applicable. The initial aggregate amount of the Canadian Commitments is $200,000,000as of the Third Amendment Effective Date is $160,000,000, as such amount may be adjusted from time to time in accordance with the terms of this Agreement.

“Canadian Defined Benefit Pension Plan” means any Canadian Pension Plan that contains a “defined benefit provision” as defined in subsection 147.1(1) of the ITA.

“Canadian Dollar Amount” means with respect to any Loan or Letter of Credit denominated in Canadian Dollars, the principal amount thereof then outstanding (or in which such participation is held).

“Canadian Dollars” means freely transferable lawful money of Canada (expressed in Canadian dollars).

 

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“Canadian Facility” means, collectively, the Canadian Commitment and the extensions of credit made thereunder.

“Canadian Guarantor” means (i) any Subsidiary Guarantor that is a Canadian Subsidiary or (ii) any other Subsidiary Guarantor that constitutes an “Excluded Subsidiary” with respect to the U.S. Obligations (but not with respect to the Canadian Obligations).

“Canadian Guaranty” means collectively, the Guaranty made by the Canadian Guarantors in favor of the Administrative Agent on behalf of the Secured Parties, substantially in the form of Exhibit E-3, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.12 or Section 6.16 with respect to the Canadian Obligations.

“Canadian L/C Borrowing” means an extension of credit resulting from a drawing under any Canadian Letter of Credit which has not been reimbursed by the Canadian Borrower on the date required under Section 2.03(d)(i) or refinanced as a Borrowing of Canadian Revolving Credit Loans.

“Canadian L/C Collateral Account” means Cash Collateral Account in the name of the Collateral Agent and for the benefit of the Canadian Secured Parties for purposes of securing the Canadian Obligations.

“Canadian L/C Exposure” means, at any time, the sum of the L/C Exposure in respect of Canadian Letters of Credit. The Canadian L/C Exposure of any Canadian Revolving Credit Lender at any time shall be its Applicable Percentage of the total Canadian L/C Exposure at such time.

“Canadian L/C Obligations” means the L/C Obligations in respect of any Canadian Letter of Credit.

“Canadian Letter of Credit” means any Letter of Credit or similar instrument (including a bank guarantee) acceptable to the applicable L/C Issuer issued, in its sole discretion for the purpose of providing credit support to the Canadian Borrower.

“Canadian Loan Party” means the Canadian Borrower and each Canadian Guarantor.

“Canadian Obligations” means (a) the Obligations of the U.S. Loan Parties under the Loan Documents with respect to (i) any Loan made to the Canadian Borrower and (ii) the other Obligations of the Canadian Loan Parties under the Loan Documents and (b) the Obligations of the Canadian Loan Parties under the Loan Documents.

“Canadian Pension Plan” means a “registered pension plan” as that term is defined in subsection 248(1) of the ITA for employees or former employees in Canada of any Loan Party.

“Canadian Prime Rate” means, for any day, the greater of (i) a fluctuating the rate of interest per annum established from time to time by the Administrative Agent as the reference rate of interest for the determination of interest rates that the Administrative Agent will charge to customers in Canada for Cdn.$ demand loans in Canada and (ii) the rate of interest per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Royal Bank of Canada as its reference rate of interest for loans made in Cdn.$ and designated as its “prime” rate being a rate set by Royal Bank of Canada’s based upon various factors, including Royal Bank of Canada costs and desired return, general economic conditions and other factors and is used as a reference point for pricing some loans, provided that in the event that Royal Bank of Canada (including any successor or assignor) does not at any time publicly announce a prime rate, such rate shall be the “prime rate” publicly announced by

 

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a Schedule I chartered bank in Canada selected by the Administrative Agent, (ii) the Bank of Canada Overnight Rate, plus 0.50%, and (iii) the BA Rate for a one month Interest Period as determined on such day, plus 1.0%average annual yield rate for one-month Cdn.$ bankers’ acceptances which rate is shown on the display referred to as the “CDOR Page” (or any display substituted therefore) of Reuters Limited (or any successor thereto or Affiliate thereof) at 10:00 a.m. (Toronto time) on such day or, if such day is not a Business Day, on the immediately preceding Business Day, plus 1.00% per annum; provided that if both such rates are equal or if such one-month bankers’ acceptance rate is unavailable for any reason on any date of determination, then the “Canadian Prime Rate” shall be the rate specified in clause (a) above. Any change in the Canadian Prime Rate due to a change in such reference rate, change in the Bank of Canada Overnight Rate or change in the one-month BA Rate shall be effective from and including the effective date of such change. Notwithstanding any provision to the contrary in this Agreement, the applicable Canadian Prime Rate shall at no time be less than 0.00% per annum.

“Canadian Prime Rate Loan” means a Loan that bears interest based on the Canadian Prime Rate.

“Canadian Protective Advances” has the meaning specified in Section 2.22(a).

“Canadian Reimbursement Obligations” means the Canadian Borrower’s obligations under Section 2.03(d) to reimburse Unreimbursed Amounts.

“Canadian Revolving Commitment Increase Lender” has the meaning specified in Section 2.14(e).

“Canadian Revolving Credit Lenders” means the Persons listed on Schedule 2.01 (or an Affiliate or branch of any such Person that is acting on behalf of such Person, in which case the term “Canadian Revolving Credit Lenders” shall include any such Affiliate or branch with respect to the Canadian Revolving Credit Loans made by such Affiliate or branch) as having a Canadian Commitment and any other Person that shall acquire a Canadian Commitment, other than any such Person that ceases to be a Canadian Revolving Credit Lender pursuant to an Assignment and Assumption.

“Canadian Revolving Credit Loan” means a Revolving Credit Loan made by the Canadian Revolving Credit Lenders to the Canadian Borrower.

“Canadian Revolving Exposure” means, with respect to any Canadian Revolving Credit Lender at any time, the sum of (a) the outstanding principal amount of Canadian Revolving Credit Loans of such Canadian Revolving Credit Lender at such time, plus (b) the outstanding principal amount of Canadian Protective Advances of such Canadian Revolving Credit Lender at such time, plus (c) an amount equal to such Canadian Revolving Credit Lender’s Applicable Percentage of the Canadian L/C Exposure at such time.

“Canadian Secured Parties” means, collectively, the Administrative Agent, the Collateral Agent, the Canadian Revolving Credit Lenders (including, for the avoidance of doubt, the L/C Issuers with respect to Canadian Letters of Credit), the Hedge Banks to the extent they are party to one or more Secured Hedge Agreements, the Cash Management Banks to the extent they are party to one or more Secured Cash Management Agreements and each co-agent or subagent appointed by the Administrative Agent or the Collateral Agent from time to time pursuant to Article IX.

“Canadian Security Agreement” has the meaning specified in the definition of “Security Agreement”.

 

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“Canadian Subsidiary” means any Subsidiary of Holdings that is organized under the laws of Canada or any province or territory thereof.

“Canadian Subsidiary Guarantor” means each Canadian Subsidiary listed on Schedule 1 and each other Canadian Subsidiary that is or becomes a party to this Agreement pursuant to Section 6.12.

“Canadian Total Outstandings” means the aggregate Outstanding Amount of all Canadian Revolving Credit Loans and all L/C Obligations that are Canadian Obligations.

“Cape Town Convention” means collectively, the official English language text of (A) the Convention on International Interests in Mobile Equipment, (B) the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, in each case adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Cape Town Treaty with respect to that country, the Cape Town Convention as in effect in such country, unless otherwise indicated, and (C) all rules and regulations adopted pursuant thereto and, in the case of each of the foregoing described in clauses (A) through (C), all amendments, supplements, and revisions thereto.

“Capital Stock” means:

(a) in the case of a corporation or company, corporate stock or share capital;

(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person (it being understood and agreed, for the avoidance of doubt, that “cash-settled phantom appreciation programs” in connection with employee benefits that do not require a dividend or distribution shall not constitute Capital Stock).

“Capitalized Lease Obligation” means at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

“Cash Collateral Account” means any Deposit Account or Securities Account that is (a) established by any Agent from time to time in its sole discretion to receive cash and Cash Equivalents (or purchase cash or Cash Equivalents with funds received) from the Loan Parties or Persons acting on their behalf pursuant to the Loan Documents, (b) with such depositaries and securities intermediaries as such Agent may determine in its sole discretion, (c) in the name of the Collateral Agent (although such account may also have words referring to a Loan Party and the account’s purpose), (d) under the control of the Collateral Agent and (e) in the case of a Securities Account, with respect to which the Collateral Agent shall be the Entitlement Holder and the only Person authorized to give Entitlement Orders with respect thereto.

 

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“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent or L/C Issuer (as applicable) and the Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of either thereof (as the context may require), cash, Cash Equivalents (if reasonably acceptable to the Administrative Agent and the applicable L/C Issuer) or deposit account balances (in the case of L/C Obligations in the respective currency or currencies in which the applicable L/C Obligations are denominated unless otherwise agreed by the Administrative Agent or L/C Issuer benefiting from such collateral) or, if the Administrative Agent or L/C Issuer benefiting from such collateral shall agree in its sole discretion, other credit support (including by backstop with a letter of credit satisfactory to the applicable L/C Issuer or by being deemed reissued under another agreement acceptable to the applicable L/C Issuer), in each case pursuant to documentation in form and substance reasonably satisfactory to (a) the Administrative Agent and (b) the applicable L/C Issuer (which documents are hereby consented to by the Lenders). “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Contribution Amount” means the aggregate amount of cash contributions made to the capital of the U.S. Borrower and designated as a “Cash Contribution Amount” as described in the definition of “Contribution Indebtedness”.

“Cash Dominion Period” means any period beginning on (a) the date on which the Excess Availability is less than the Applicable Threshold for five consecutive Business Days or (b) the date on which a Specified Default has occurred and is continuing and ending on the first Business Day (each such date, a “Release Date”) on which (i) the Excess Availability is greater than the Applicable Threshold for more than 30 consecutive days and (ii) no Specified Default has occurred and is continuing; provided, that during any period of twelve consecutive months, there shall occur no more than four Release Dates.

“Cash Equivalents" means:

(1) Dollars, Alternative Currencies, the national currency of any Participating Member State of the European Union (as it is constituted on the Closing Date) and, with respect to any Non-U.S. Subsidiaries, other currencies held by such Non-U.S. Subsidiary in the ordinary course of business;

(2) securities issued or directly guaranteed or insured by the government of the United States, the United Kingdom or any Participating Member State of the European Union (as it is constituted on the Closing Date) or any agency or instrumentality thereof in each case with maturities not exceeding two years from the date of acquisition;

(3) money market deposits, certificates of deposit, time deposits and eurodollar time deposits with maturities of two years or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding two years, and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250,000,000 in the case of domestic banks or $100,000,000 (or the equivalent Dollar Amount) in the case of foreign banks;

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above and clause (6) below entered into with any financial institution or securities dealers of recognized national standing meeting the qualifications specified in clause (3) above;

(5) commercial paper or variable or fixed rate notes issued by a corporation or other Person (other than an Affiliate of the U.S. Borrower) rated at least “A-2”, “P-2” or “F2” or the equivalent thereof by Moody’s, S&P or Fitch (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within two years after the date of acquisition;

 

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(6) readily marketable direct obligations issued by any state, commonwealth or territory of the United States of America or any political subdivision or taxing authority thereof having an Investment Grade Rating from Moody’s, S&P or Fitch (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(7) Indebtedness issued by Persons (other than the Sponsor) with a rating of “A” or higher from S&P, “A-2” or higher from Moody’s or “A” or higher from Fitch (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition, and marketable short-term money market and similar securities having a rating of at least “A-2”, “P-2” or “F2” from S&P, Moody’s or Fitch (or reasonably equivalent ratings of another internationally recognized ratings agency);

(8) investment funds investing at least 95% of their assets in investments of the types described in clauses (1) through (7) above and (9) and (10) below;

(9) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA (or the equivalent thereof) or better by S&P, Aaa3 (or the equivalent thereof) or better by Moody’s or AAA (or the equivalent thereof) or better by Fitch (or reasonably equivalent ratings of another internationally recognized ratings agency); and

(10) in the case of investments by any Non-U.S. Subsidiary or investments made in a country outside the United States of America, other investments of comparable tenor and credit quality to those described in the foregoing clauses (1) through (9) customarily utilized in the countries where such Non-U.S. Subsidiary is located or in which such investment is made.

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

“Cash Management Agreement” means any agreement or arrangement to provide Cash

Management Services to Holdings, the U.S. Borrower or any Restricted Subsidiary.

“Cash Management Bank” means any Person that (a) at the time it enters into a Cash Management Agreement, is a Lender or an Agent or an Affiliate of a Lender or an Agent, (b) in the case of any Cash Management Agreement in effect on or prior to the Closing Date, is, as of the Closing Date or within 45 days thereafter, a Lender or an Agent or an Affiliate of a Lender or an Agent and a party to a Cash Management Agreement or (c) within 45 days after the time it enters into the applicable Cash Management Agreement, becomes a Lender or an Affiliate of a Lender or an Agent, in each case, in its capacity as a party to such Cash Management Agreement.

“Cash Management Reserves” means all Reserves which the Collateral Agent from time to time establish, in its Permitted Discretion as being appropriate to reflect the reasonably anticipated liabilities and obligations of the Loan Parties with respect to Cash Management Services then provided or outstanding; provided that any such Reserves shall be net of any cash securing the Cash Management Services.

 

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“Cash Management Services” means any of the following to the extent not constituting a line of credit (other than an overnight draft facility that is not in default); automated clearing house transactions, treasury and/or cash management services, including, without limitation, treasury, depository, overdraft, credit, purchasing or debit card, non-card e-payable services, electronic funds transfer, treasury management services (including controlled disbursement services, overdraft automatic clearing house fund transfer services, return items and interstate depository network services), other demand deposit or operating account relationships, foreign exchange facilities, and merchant services.

“Casualty Event” means any event that gives rise to the receipt by any Borrower Party of any casualty insurance proceeds or condemnation awards or that gives rise to a taking by a Governmental Authority in respect of any equipment, fixed assets or real property (including any improvements thereon) to replace, restore or repair, or compensate for the loss of, such equipment, fixed assets or real property.

“CCAA” means the Companies’ Creditors Arrangement Act (Canada).

“Central Bank Rate” means the Bank of England’s Bank Rate as published by the Bank of England from time to time.

“Central Bank Rate Adjustment” means, in relation to the Central Bank Rate prevailing at close of business on any RFR Business Day, the 20% trimmed arithmetic mean of the Central Bank Rate Spreads for the 5 most immediately preceding RFR Business Days for which the RFR is available.

“Central Bank Rate Spread” means, in relation to any RFR Business Day, the difference (expressed as a percentage rate per annum) between (x) the RFR for such RFR Business Day and (y) the Central Bank Rate prevailing at close of business on such RFR Business Day.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980.

“CERCLIS” means the Comprehensive Environmental Response, Compensation, and Liability Information System maintained by the U.S. Environmental Protection Agency.

A “Change of Control” will be deemed to occur if:

(a) at any time, Holdings ceases to own, (i) directly, beneficially, 100% of the issued and outstanding Equity Interests of the U.S. Borrower or (ii) directly or indirectly, beneficially, 100% of the issued and outstanding Equity Interests of the Canadian Borrower; or

(b) at any time prior to the consummation of a Qualified IPO, the Permitted Holders, taken together, shall cease to beneficially own, directly or indirectly, at least 50.1% of the Voting Stock (measured by reference to voting power) of Holdings (determined on a fully diluted basis); or

(c) at any time after the consummation of a Qualified IPO, any person or “group” (within the meaning of Rule 13d-5 under the Exchange Act, as in effect on the date hereof, but excluding any employee benefit plan and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than one or more Permitted Holders, acquires beneficial ownership of both (i) more than 35% of the Voting Stock (measured by reference to voting power) of Holdings (determined on a fully diluted basis) and (ii) more than the percentage of Voting Stock (measured by reference to voting power) of Holdings that is at the time beneficially owned, directly or indirectly, by the Permitted Holders, taken together; or

(d) at any time, a Change of Control (as defined in the Senior Notes Indenture or the Fixed Asset Credit Agreement) shall have occurred; or

 

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(e) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the U.S. Borrower and/or the Canadian Borrower and their respective Subsidiaries, taken as a whole, to any Person other than one or more Permitted Holders.

“Closing Date” means April 4, 2019.

“Closing Date Collateral Allocation Agreement” means the Collateral Allocation Agreement dated as of the date hereof, executed by the Administrative Agent, on behalf of itself and the Lenders.

“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited, as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).

“Co-Borrower Joinder Agreement” means a joinder agreement, in substantially the form of Exhibit K hereto or otherwise reasonably acceptable to the Administrative Agent, pursuant to which a Co-Borrower agrees to become an obligor in respect of Borrowings under this Agreement.

“Co-Borrowers” means Wholly Owned Restricted Subsidiaries organized in any Applicable Jurisdiction from time to time designated by the Borrower Representative to the Administrative Agent as “borrowers” with respect to Borrowings in accordance with Section 11.01, and “Co-Borrower” means any one of them.

“Co-Documentation Agent” means each of Canadian Imperial Bank of Commerce and Bank of America, N.A., in their respective capacities as co-documentation agents.

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means all of the “Collateral” (or similar term) referred to in the Collateral Documents and all of the other property and assets that are or are required under the terms of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

“Collateral Agent” means Royal Bank, acting through such of its Affiliates or branches as it may designate, in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent permitted by the terms hereof.

“Collateral Allocation Agreement” means a Collateral Allocation Agreement entered into by the Administrative Agent, on behalf of itself and the Lenders, substantially in the form of the Closing Date Collateral Allocation Agreement, or otherwise in form and substance reasonably satisfactory to the Administrative Agent.

“Collateral Documents” means, collectively, the U.S. Security Agreement, the Intellectual Property Security Agreement, the Canadian Security Agreement, the U.S. Security Agreement for Canadian Grantors, Aircraft Mortgages, collateral assignments, Security Agreement Supplements, Intellectual Property Security Agreement Supplements, Aircraft Mortgage Supplements, security agreements, pledge agreements or other similar agreements delivered to the Collateral Agent pursuant to Section 6.12, Section 6.14 or Section 6.16, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

 

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“Commitment” means, the Canadian Commitments and the U.S. Commitments, individually or collectively as the context may require. The original Dollar Amount of the Commitments shall beis $300,000,000.00 on the Closing400,000,000 as of the Third Amendment Effective Date, as such amount may be adjusted from time to time in accordance with the terms of this Agreement.

“Commitment Letter” means the Amended and Restated Commitment Letter, dated January 10, 2019, by and among the Arrangers, certain of their respective affiliates, the Initial Principal Investors and the U.S. Borrower.

“Committed Loan Notice” means a notice of (a) a Revolving Credit Borrowing, (b) a conversion of Loans from one Type to another or (c) a continuation of EurocurrencyTerm Benchmark Rate Loans, BA Equivalent Loans or RFR Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A-1.

“Commodity Account” has the meaning given to such term in the UCC or PPSA, as applicable.

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

“Company” has the meaning specified in the Preliminary Statements of this Agreement.

“Company Competitor” means any Person that competes with the business of Holdings, the U.S. Borrower and their respective direct and indirect Subsidiaries from time to time.

“Company Material Adverse Effect” means any event, development, circumstance, effect or change that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (i) the businesses, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (ii) the ability of the Company to consummate the transactions contemplated by the Acquisition Agreement, or that would materially delay (beyond the End Date (as defined in the Acquisition Agreement)) the consummation by the Company of the transactions contemplated hereby, in the case of clause (i) only, other than any event, development, circumstance, effect or change relating to or arising out of: (a) general economic, regulatory or political conditions or conditions in the financial, credit or securities markets (including changes in interest or currency exchange rates); (b) any acts of God, natural disasters, terrorism, hostilities, sabotage, war or any escalation or worsening of acts of terrorism, hostilities or war; (c) any event, development, circumstance, effect or change in any of the industries or markets in which the Company or any of its Subsidiaries operates, including cyclical fluctuations and trends; (d) any enactment of, change in, or change in interpretation of, applicable Law or in GAAP or applicable accounting standards; (e) the announcement, pendency or performance of the transactions contemplated hereby, including by reason of the identity of Purchaser (as defined in the Acquisition Agreement) or any communication by Purchaser regarding the plans or intentions of Purchaser with respect to the conduct of the business of the Company or any of its Subsidiaries, and including the impact of any of the foregoing on any relationships, contractual or otherwise, with customers, suppliers, distributors, collaboration partners, employees or regulators (provided that the exception set forth in this clause (e) shall not apply in connection with the representations and warranties set forth in Section 3.4 of the Acquisition Agreement, Section 3.9(i) of the Acquisition Agreement or Section 3.10 of the Acquisition Agreement to the extent they expressly address the consequences of the announcement, pendency or performance of the transactions contemplated hereby, or the condition set forth in Section 7.2(b) of the Acquisition Agreement as it relates thereto); (f) any action taken, or failure to take any action, in each case, to the extent such action or failure to take action is required by the express terms of the Acquisition Agreement or to which Purchaser has approved, consented or requested in writing; or (g) any failure by the Company or any of its Subsidiaries to meet any projections, estimates or forecasts (financial, operational or otherwise) for any period, or any

 

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changes in credit ratings of or with respect to the Company or any of its Subsidiaries, as applicable, or any of their indebtedness or securities (it being understood that the facts or occurrences giving rise or contributing to such failure, to the extent not otherwise excluded by another clause of this definition, may be taken into account in determining whether there has been a Company Material Adverse Effect); provided, however, in the case of the foregoing clause (a), clause (b), clause (c) and clause (d), in the event that the Company and its Subsidiaries, taken as a whole, are materially and disproportionately affected by such event, development, circumstance, effect or change relative to other participants in the business and industries in which the Company and its Subsidiaries operate, the extent (and only the extent) of such adverse effect, relative to such other participants, on the Company or any of its Subsidiaries may be taken into account in determining whether there has been a Company Material Adverse Effect. Capitalized terms in the preceding definition (other than the Acquisition Agreement and Company Material Adverse Effect) are used as defined in the Acquisition Agreement in effect on December 18, 2018.

“Compliance Certificate” means a certificate substantially in the form of Exhibit C or such other form as may be agreed between the U.S. Borrower and the Administrative Agent.

“Conditional Account” has the meaning specified in clause (p) of the definition of “Eligible Accounts”.

“Consolidated Cash Interest Expense” means, with respect to any Person for any period, without duplication, the cash interest expense (including that attributable to any Capitalized Lease Obligation), net of cash interest income, with respect to Indebtedness of such Person and its Restricted Subsidiaries for such period, other than non-recourse Indebtedness, including commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net cash costs under hedging agreements (other than in connection with the early termination thereof); excluding, in each case:

(i) amortization of deferred financing costs, debt issuance costs, commissions, fees and expenses and any other amounts of non-cash interest (including as a result of the effects of acquisition method accounting or pushdown accounting),

(ii) interest expense attributable to the movement of the mark-to-market valuation of obligations under Swap Obligations or other derivative instruments,

(iii) costs associated with incurring or terminating Swap Contracts and cash costs associated with breakage in respect of hedging agreements for interest rates,

(iv) commissions, discounts, yield, make-whole premium and other fees and charges (including any interest expense) incurred in connection with any non-recourse Indebtedness,

(v) “additional interest” owing pursuant to a registration rights agreement with respect to any securities,

(vi) any payments with respect to make-whole premiums or other breakage costs of any Indebtedness, including any Indebtedness issued in connection with the Transactions,

(vii) penalties and interest relating to Taxes,

(viii) accretion or accrual of discounted liabilities not constituting Indebtedness,

 

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(ix) interest expense attributable to Holdings resulting from push-down accounting,

(x) any expense resulting from the discounting of Indebtedness in connection with the application of recapitalization or purchase accounting,

(xi) any interest expense attributable to the exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto in connection with the Transactions, any acquisition or Investment, and

(xii) annual agency fees paid to any trustees, administrative agents and collateral agents with respect to any secured or unsecured loans, debt facilities, debentures, bonds, commercial paper facilities or other forms of Indebtedness (including any security or collateral trust arrangements related thereto), including the Senior Notes.

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

“Consolidated EBITDA” means, with respect to any Person and its Restricted Subsidiaries on a consolidated basis for any period, the Consolidated Net Income of such Person for such period:

(1) increased, in each case (other than with respect to clauses (k), (l) and (p) below) to the extent deducted and not added back or excluded in calculating such Consolidated Net Income (and without duplication), by:

(a) provision for taxes based on income, profits or capital, including federal, state, provincial, territorial, franchise, excise, property and similar taxes and foreign withholding taxes paid or accrued, including giving effect to any penalties and interest with respect thereto, and state taxes in lieu of business fees (including business license fees) and payroll tax credits, income tax credits and similar credits and including an amount equal to the amount of tax distributions actually made to the holders of Equity Interests of such Person or its Restricted Subsidiaries or any direct or indirect parent of such Person or its Restricted Subsidiaries in respect of such period (in each case, to the extent attributable to the operations of such Person and its Subsidiaries), which shall be included as though such amounts had been paid as income taxes directly by such Person or its Restricted Subsidiaries; plus

(b) Consolidated Interest Expense; plus

(c) all depreciation and amortization charges and expenses, including amortization or expense recorded for upfront payments related to any contract signing and signing bonus and incentive payments; plus

(d) the amount of any interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any Restricted Subsidiary of such Person that is not a Wholly Owned Restricted Subsidiary of such Person; plus

(e) the amount of management, board of directors, monitoring, consulting, transaction and advisory fees (including termination fees) and related indemnities, charges and expenses paid or accrued to or on behalf of any direct or indirect parent of the U.S. Borrower or any of the Permitted Holders, in each case, to the extent permitted by Section 6.18; plus

 

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(f) earn-out obligations incurred in connection with any acquisition or other Investment and paid or accrued during the applicable period, including any mark to market adjustments; plus

(g) all payments, charges, costs, expenses, accruals or reserves in connection with the rollover, acceleration or payout of equity interests held by any future, present or former director, officer, employee, manager, consultant or independent contractor of any Borrower Party and all losses, charges and expenses related to payments made to holders of options, cash-settled appreciation rights or other derivative equity interests in the common equity of such Person or any direct or indirect parent of the U.S. Borrower in connection with, or as a result of, any distribution being made to equityholders of such Person or any of its direct or indirect parents, which payments are being made to compensate such holders as though they were equityholders at the time of, and entitled to share in, such distribution; plus

(h) all non-cash losses, charges and expenses, including any write-offs or write-downs; provided that if any such non-cash loss, charge or expense represents an accrual or reserve for potential cash items in any future four-fiscal quarter period, (i) such Person may determine not to add back such non-cash loss, charge or expense in the period for which Consolidated EBITDA is being calculated and (ii) to the extent such Person does decide to add back such non-cash loss, charge or expense, the cash payment in respect thereof in such future four-fiscal quarter period will be subtracted from Consolidated EBITDA for such future four-fiscal quarter period; plus

(i) all costs and expenses in connection with pre-opening and opening and closure and/or consolidation of facilities; plus

(j) restructuring charges, accruals or reserves and business optimization expense, including any restructuring costs and integration costs incurred in connection with the Transactions and any other acquisitions, start-up costs (including entry into new market/channels, new service offerings, new platforms or new contracts), costs related to the closure, relocation, reconfiguration and/or consolidation of facilities and costs to relocate employees, integration and transaction costs, retention charges, severance, contract termination costs, recruiting and signing bonuses and expenses, future lease commitments, systems establishment costs, systems, facilities or equipment conversion costs, excess pension charges and consulting fees, expenses attributable to the implementation of costs savings initiatives, costs associated with tax projects/audits, expenses relating to any decommissioning or reconfiguration of fixed assets for alternative uses and costs consisting of professional consulting or other fees relating to any of the foregoing; plus

(k) Pro Forma Cost Savings; plus

(l) amounts included on Schedule 1.01(a), attached hereto, to the extent such amounts, or amounts of similar nature to those listed on Schedule 1.01(a), without duplication, to the extent adjustments of such nature continue to be applicable during the period in which Consolidated EBITDA is being calculated; provided that any such adjustments that consist of reductions in costs and other operating improvements or synergies shall be calculated in accordance with, and satisfy the requirements specified in, the definition of “Pro Forma Basis”; plus

(m) the amount of loss or discount on sale of receivables and related assets to a Receivables Subsidiary in connection with a Receivables Financing; plus

 

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(n) with respect to any joint venture of such Person or any Restricted Subsidiary thereof that is not a Restricted Subsidiary, an amount equal to (i) such Person’s or such Restricted Subsidiary’s proportionate share of the net income of such joint venture that is excluded from Consolidated Net Income as a result of clause (h)(i) of the definition of Consolidated Net Income and (ii) the proportion of those items described in clauses (a), (b) and (c) above relating to such joint venture corresponding to such Person’s and the Restricted Subsidiaries’ proportionate share of such joint venture’s Consolidated Net Income (determined as if such joint venture were a Restricted Subsidiary) solely to the extent Consolidated Net Income was reduced thereby; plus

(o) charges consisting of income attributable to minority interests and noncontrolling interests of third parties in any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, excluding cash distributions in respect thereof; plus

(p) the amount of incremental contract value of the Borrower Parties that the U.S. Borrower in good faith reasonably believes would have been realized or achieved as Consolidated EBITDA from the entry into (and performance under) binding and effective new agreements with new customers or, if generating incremental contract value, new agreements (or amendments to existing agreements) with existing customers (“New Contracts”) during the relevant Test Period had such New Contracts been effective and had performance thereunder commenced as of the beginning of the relevant Test Period (including, without limitation, such incremental contract value attributable to New Contracts that are in excess of (but without duplication of) contract value attributable to New Contracts that has been actually realized as Consolidated EBITDA during such Test Period) as long as such incremental contract value is reasonably identifiable and factually supportable; provided that such incremental contract value shall be subject only to certification by a Responsible Officer of the Borrower Representative and shall be calculated on a Pro Forma Basis as though the full run rate effect of such incremental contract value had been realized as Consolidated EBITDA on the first day of such period;

(2) decreased (without duplication and to the extent increasing such Consolidated Net Income for such period) by (i) non-cash gains or income, excluding any non-cash gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that were deducted (and not added back) in the calculation of Consolidated EBITDA for any prior period ending after the Closing Date and (ii) the amount of any minority interest income consisting of a Subsidiary loss attributable to minority equity interest of third parties in any Subsidiary that is not a Wholly Owned Subsidiary (to the extent not deducted from Consolidated Net Income for such period);

(3) increased (with respect to losses) or decreased (with respect to gains) by, without duplication, any net realized gains and losses relating to (i) amounts denominated in foreign currencies resulting from the application of FASB ASC 830 (including net realized gains and losses from exchange rate fluctuations on intercompany balances and balance sheet items, net of realized gains or losses from related Swap Contracts (entered into in the ordinary course of business or consistent with past practice)) or (ii) any other amounts denominated in or otherwise trued-up to provide similar accounting as if it were denominated in foreign currencies; and

(4) increased (with respect to losses) or decreased (with respect to gains) by, without duplication, any gain or loss relating to Swap Contracts (excluding Swap Contracts entered into in the ordinary course of business or consistent with past practice);

provided, that the Borrower Representative may, in its sole discretion, elect to not make any adjustment for any item pursuant to the foregoing clauses (1) through (4) above if any such item individually is less than $2,000,000 in any fiscal quarter.

 

 

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“Consolidated First Lien Net Leverage Ratio” means, as of any date of determination, with respect to the Borrower Parties on a consolidated basis, the ratio of (a) Consolidated Funded First Lien Indebtedness as of such date (less the amount of Adjusted Cash and unrestricted Cash Equivalents of the Borrower Parties as of such date) to (b) Consolidated EBITDA of the Borrower Parties for such Test Period, in each case on a Pro Forma Basis.

“Consolidated Fixed Charges” means, for any period, the sum, without duplication, of the amounts determined for any Person and its Restricted Subsidiaries on a consolidated basis equal to (i) Consolidated Cash Interest Expense (for purposes of this definition only, calculated net of cash interest income received in such period), (ii) scheduled payments of principal on Consolidated Funded Indebtedness and (iii) all cash Restricted Payments made by any Person or any Restricted Subsidiary during such period pursuant to clause 22 of Section 7.05 in excess of $2,000,000.

“Consolidated Funded First Lien Indebtedness” means (i) Consolidated Funded Indebtedness of the Borrower Parties that is secured by a Lien on the Collateral on an equivalent priority basis (but, in each case, without regard to the control of remedies) with the Liens on the Collateral securing the Obligations and (ii) all Fixed Asset Obligations that constitute Consolidated Funded Indebtedness of the Borrower Parties. For the avoidance of doubt, Consolidated Funded First Lien Indebtedness shall not include Capitalized Lease Obligations other than those that are secured on an equal priority basis with the Liens on the Collateral securing the Obligations.

“Consolidated Funded Indebtedness” of a Person means all Indebtedness of the type described in clauses (a)(i), (a)(ii) (but excluding surety bonds, performance bonds or other similar instruments), (a)(iv) (but solely in respect of the amount of outstanding Indebtedness of the type described in (a)(iv) that is in excess of $5,000,000) and clause (b) (in respect of Indebtedness of the type described in clauses (a)(i), (a)(ii) (but excluding Indebtedness constituting surety bonds, performance bonds or other similar instruments) and (a)(iv) (but solely in respect of the amount of Indebtedness of the type described in (a)(iv) that is in excess of $5,000,000)) of the definition of “Indebtedness” of such Person and its Restricted Subsidiaries on a consolidated basis, in an amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but (x) excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any acquisition and (y) any Indebtedness that is issued at a discount to its initial principal amount shall be calculated based on the entire stated principal amount thereof, without giving effect to any discounts or upfront payments), excluding obligations in respect of letters of credit (including Letters of Credit), bank guarantees and guarantees on first demand, in each case, except to the extent of unreimbursed amounts thereunder. For the avoidance of doubt, it is understood that (i) obligations (a) under Swap Contracts, Cash Management Services and any Receivables Financing or Factoring Transaction or (b) owed by Unrestricted Subsidiaries, do not constitute Consolidated Funded Indebtedness, and (ii) interest paid on Indebtedness constituting Consolidated Funded Indebtedness in the form of additional Indebtedness does constitute Consolidated Funded Indebtedness.

“Consolidated Funded Senior Secured Indebtedness” means (i) Consolidated Funded Indebtedness of the Borrower Parties that is secured by a Lien on the Collateral; provided that such Consolidated Funded Indebtedness is not expressly subordinated pursuant to a written agreement in right of payment to the Obligations and (ii) all Fixed Asset Obligations that constitute Consolidated Funded Indebtedness of the Borrower Parties.

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

 

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(a) the aggregate interest expense of such Person and its Restricted Subsidiaries for such period, calculated on a consolidated basis in accordance with GAAP, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including pay in kind interest payments, amortization of original issue discount, the interest component of Capitalized Lease Obligations and net payments and receipts (if any) pursuant to interest rate Swap Contracts (other than in connection with the early termination thereof) but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of Indebtedness, Swap Contracts or other derivative instruments, all amortization and write-offs of deferred financing fees, debt issuance costs, commissions, discounts, fees and expenses and expensing of any bridge, commitment or other financing fees, costs of surety bonds, charges owed with respect to letters of credit, bankers’ acceptances or similar facilities, all discounts, commissions, fees and other charges associated with any Receivables Financing or Factoring Transaction, and any expense resulting from the discounting of Indebtedness in connection with the application of recapitalization or purchase accounting); plus

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

(c) interest income of the referent Person and its Restricted Subsidiaries for such period;

provided that (a) when determining Consolidated Interest Expense in respect of any four-quarter period ending prior to the first anniversary of the Closing Date, Consolidated Interest Expense will be calculated by multiplying the aggregate Consolidated Interest Expense accrued since the Closing Date by 365 and then dividing such product by the number of days from and including the Closing Date to and including the last day of such period and (b) in the case of any Person that became a Restricted Subsidiary of such Person after the commencement of such four-quarter period, the interest expense of such Person paid in cash prior to the date on which it became a Restricted Subsidiary of such Person will be disregarded. For purposes of this definition, interest on Capitalized Lease Obligations will be deemed to accrue at the interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligations in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the net income (or loss) of such Person and its Restricted Subsidiaries for such period, calculated on a consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends; provided that (without duplication):

(a) all net after-tax extraordinary, nonrecurring, infrequent, exceptional or unusual gains, losses, income, expenses and charges in each case as determined in good faith by such Person, and in any event including, without limitation, all restructuring, severance, relocation, retention and completion bonuses or payments, consolidation, integration or other similar charges and expenses, contract termination costs, system establishment charges, conversion costs, start-up or closure or transition costs, expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses, fees, expenses or charges relating to curtailments, settlements or modifications to pension and post-retirement employee benefit plans in connection with the Transactions or any acquisition or Permitted Investment, expenses associated with strategic initiatives, facilities shutdown and opening costs, and any fees, expenses, charges or change in control payments related to the Transactions or any acquisition or Permitted Investment (including any transition-related expenses (including retention or transaction-related bonuses or payments) incurred before, on or after the Closing Date), will be excluded;

(b) all (i) losses, charges and expenses relating to the Transactions, (ii) transaction fees, costs and expenses incurred in connection with any contemplated equity issuances, investments, acquisitions, dispositions, recapitalizations, mergers, amalgamations, option buyouts and the Incurrence, modification or repayment of Indebtedness permitted to be Incurred under this Agreement (including any

 

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Refinancing Indebtedness in respect thereof) or the Fixed Asset Credit Agreement or any amendments, waivers or other modifications under the agreements relating to such Indebtedness or similar transactions (in each case, whether or not consummated), and (iii) without duplication of any of the foregoing, non-operating or non-recurring professional fees, costs and expenses for such period will be excluded;

(c) all net after-tax income, loss, expense or charge from abandoned, closed or discontinued operations and any net after-tax gain or loss on the disposal of abandoned, closed or discontinued operations (and all related expenses) other than in the ordinary course of business (as determined in good faith by such Person) will be excluded;

(d) all net after-tax gain, loss, expense or charge attributable to business dispositions and asset dispositions, including the sale or other disposition of any Equity Interests of any Person, other than in the ordinary course of business (as determined in good faith by such Person), will be excluded;

(e) all net after-tax income, loss, expense or charge attributable to the early extinguishment, conversion or cancellation of Indebtedness, Swap Contracts or other derivative instruments (including deferred financing costs written off and premiums paid) will be excluded;

(f) all non-cash gains, losses, expenses or charges attributable to the movement in the mark-to-market valuation of Indebtedness, Swap Contracts or other derivative instruments will be excluded;

(g) any non-cash or unrealized currency translation or foreign currency transaction gains and losses related to changes in currency exchange rates (including, without limitation, remeasurements of Indebtedness and any net loss or gain resulting from (i) Swap Contracts for currency exchange risk and (ii) intercompany Indebtedness), will be excluded;

(h) (i) the net income for such period of any Person that is not the referent Person or a Restricted Subsidiary of the referent Person or that is accounted for by the equity method of accounting, will be included only to the extent of the amount of dividends or distributions or other payments that are paid in or converted into cash or that, as reasonably determined by a responsible financial or accounting officer of the referent Person or a Restricted Subsidiary of the referent Person, could have been paid in or converted into (subject, in the case of a dividend or other distribution or return on investment to a Restricted Subsidiary, to the limitations contained in clause (v) below), cash with respect to such equity ownership to the referent Person or a Restricted Subsidiary thereof in respect of such period; and (ii) without duplication, the net income for such period will include any ordinary course dividends or distributions or other payments paid in cash (or converted into cash) with respect to such equity ownership received from any such Person during such period in excess of the amounts included in subclause (i) above;

(i) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies will be excluded;

(j) the effects of purchase accounting, fair value accounting or recapitalization accounting adjustments (including the effects of such adjustments pushed down to the referent Person and its Restricted Subsidiaries) resulting from the application of purchase accounting, fair value accounting or recapitalization accounting, including in relation to the Transactions and any acquisition consummated before or after the Closing Date (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items), and the amortization, write-down or write-off of any amounts thereof, net of taxes, will be excluded;

 

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(k) all non-cash impairment charges and asset write-ups, write-downs and write-offs, in each case pursuant to GAAP, and the amortization of intangibles arising from the application of GAAP will be excluded;

(l) all non-cash expenses realized in connection with or resulting from equity or equity-linked compensation plans, employee benefit plans or agreements or post-employment benefit plans or agreements, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock, stock appreciation or other similar rights will be excluded;

(m) any costs or expenses incurred in connection with the payment of dividend equivalent rights to holders of equity-based incentive awards pursuant to any management equity plan, stock option plan or any other management or employee benefit plan or agreement or post-employment benefit plan or agreement will be excluded;

(n) accruals and reserves for liabilities or expenses that are established or adjusted as a result of the Transactions within 24 months after the Closing Date will be excluded;

(o) all amortization and write-offs of deferred financing fees, debt issuance costs, commissions, fees and expenses, costs of surety bonds, charges owed with respect to letters of credit, bankers’ acceptances or similar facilities, and expensing of any bridge, commitment or other financing fees (including in connection with a transaction undertaken but not completed), will be excluded;

(p) all discounts, commissions, fees and other charges (including interest expense) associated with any Receivables Financing or Factoring Transaction will be excluded;

(q) (i) the non-cash portion of “straight-line” rent expense will be excluded and (ii) the cash portion of “straight-line” rent expense that exceeds the amount expensed in respect of such rent expense will be included;

(r) expenses and lost profits with respect to liability or casualty events or business interruption will be disregarded to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer, but only to the extent that such amount (i) has not been denied by the applicable carrier in writing and (ii) is in fact reimbursed within 365 days of the date on which such liability was discovered or such casualty event or business interruption occurred (with a deduction for any amounts so added back that are not reimbursed within such 365-day period); provided that any proceeds of such reimbursement when received will be excluded from the calculation of Consolidated Net Income to the extent the expense or lost profit reimbursed was previously disregarded pursuant to this clause (r);

(s) losses, charges and expenses that are covered by indemnification or other reimbursement provisions in connection with any asset disposition will be excluded to the extent actually reimbursed, or, so long as such Person has made a determination that a reasonable basis exists for indemnification or reimbursement, but only to the extent that such amount is in fact indemnified or reimbursed within 365 days of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so indemnified or reimbursed within such 365 days);

 

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(t) non-cash charges or income relating to increases or decreases of deferred tax asset valuation allowances will be excluded;

(u) cash dividends or returns of capital from Investments (such return of capital not reducing the ownership interest in the underlying Investment), in each case received during such period, to the extent not otherwise included in Consolidated Net Income for that period or any prior period subsequent to the Closing Date will be included;

(v) [reserved];

(w) any Initial Public Company Costs will be excluded;

(x) any (i) severance or relocation costs or expenses, (ii) one-time non-cash compensation charges, (iii) the costs and expenses related to employment of terminated employees, or (iv) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights of officers, directors and employees, in each case of such Person or any of its Restricted Subsidiaries, shall be excluded; and

(y) any non-cash interest expense and non-cash interest income, in each case to the extent there is no associated cash disbursement or receipt, as the case may be, before the latest maturity date of any then outstanding Revolving Credit Loan Tranche, shall be excluded;

provided that the Borrower Representative may, in its sole discretion, elect to not make any adjustment for any item pursuant to clauses (a) through (y) above if any such item individually is less than $2,000,000 in any fiscal quarter.

“Consolidated Senior Secured Net Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Senior Secured Indebtedness as of such date (less the amount of Adjusted Cash and unrestricted Cash Equivalents of the Borrower Parties as of such date), and in each case, calculated on a Pro Forma Basis to (b) Consolidated EBITDA of the Borrower Parties for the Test Period, calculated on a Pro Forma Basis.

“Consolidated Total Assets” means the total consolidated assets of the Borrower Parties, as shown on the most recent consolidated balance sheet of the Borrower Parties, determined on a Pro Forma Basis.

“Consolidated Total Net Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness of the Borrower Parties as of such date (less the amount of Adjusted Cash and unrestricted Cash Equivalents of the Borrower Parties as of such date) and in each case, calculated on a Pro Forma Basis to (b) Consolidated EBITDA of the Borrower Parties for the Test Period, calculated on a Pro Forma Basis.

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

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

(2) to advance or supply funds:

 

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

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

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, loan agreement, indenture, mortgage, deed of trust, lease, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Contribution Indebtedness” means Indebtedness of any Borrower Party in an aggregate principal amount not greater than the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of the U.S. Borrower (other than Cure Equity or any such cash contributions applied to cure any default under any “equity cure” provisions with respect to any financial covenant under the Fixed Asset Credit Agreement) or any Restricted Subsidiary (other than, in the case of such Restricted Subsidiary, contributions by any Borrower Party to its capital) after the Closing Date and designated as a Cash Contribution Amount.

“Control Account” means a Securities Account or Commodity Account that is the subject of an effective Deposit Account Control Agreement and that is maintained by any Loan Party with an Approved Securities Intermediary. “Control Account” includes all Financial Assets held in a Securities Account or a Commodity Account and all certificates and instruments, if any, representing or evidencing the Financial Assets contained therein.

“Controlled Non-U.S. Subsidiary” means any entity (a) in which the U.S. Borrower (or any member of the U.S. consolidated group of which the U.S. Borrower is a member) is a United States shareholder within the meaning of Section 951(b) of the Code and (b) that is a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“Credit Agreement” means (a) this Agreement and (b) whether or not this Agreement remains outstanding, if designated by the Borrower Representative to be included in the definition of “Credit Agreement,” one or more (i) debt facilities, indentures or commercial paper facilities providing for revolving credit loans, term loans, notes, debentures, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (ii) debt securities, notes, mortgages, guarantees, collateral documents, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (iii) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrower(s) or issuer(s) and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, increased (provided that such increase in borrowings is permitted under this Agreement), replaced or refunded in whole or in part from time to time and whether by the same or any other agent, lender or investor or group of lenders or investors.

“Credit Exposure” means, as to any Lender at any time, such Lender’s Revolving Exposure at such time.

“Credit Extension” means each of the following: (a) a Borrowing and (b) a L/C Credit Extension.

“Cure Amount” has the meaning specified in Section 8.03(a).

 

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“Cure Equity” has the meaning specified in Section 8.03(a).

“Cure Right” has the meaning specified in Section 8.03(a).

“Currency Sublimit” means that the Dollar Amount of any Revolving Credit Loans and the

Outstanding Amount of any L/C Obligations with respect to any Alternative Currency shall be an amount to be agreed among the Borrower, the Administrative Agent and each applicable Lender.

“Daily Simple RFR” means, for any day (an “RFR Interest Day”), an interest rate per annum equal to the greater of (a)(x) SONIA for the day that is five (5) RFR Business Days prior to (i) if such RFR Interest Day is an RFR Business Day, such RFR Interest Day or (ii) if such RFR Interest Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Interest Day (such RFR Business Day determined pursuant to each of subclauses (i) and (ii), the “RFR Lookback Day”), (y) if SONIA is not available for the RFR Lookback Day determined pursuant to clause (x) above, if by 5:00 p.m. (London time) on the second (2nd) Business Day immediately following any day “i”, RFR in respect of such day “i” has not been published on the SONIA Administrator’s Website, then RFR for such day “i” will be RFR as published in respect of the first preceding Business Day for which RFR was published on the SONIA Administrator’s Website (provided that RFR determined pursuant to this clause (y) shall be utilized for purposes of calculation of Daily Simple RFR for no more than three (3) consecutive RFR Interest Days) or (z) if RFR has been determined pursuant to clause (y) above for three (3) consecutive RFR Interest Days and SONIA remains unavailable for the relevant RFR Lookback Day, RFR shall be (1) the percentage rate per annum which is the aggregate of (I) the Central Bank Rate for such RFR Lookback Day and (II) the applicable Central Bank Rate Adjustment or (2) if clause (z)(1) applies but the Central Bank Rate for the applicable RFR Lookback Day is not available, the Daily Simple RFR for such RFR Lookback Day shall be the percentage rate per annum which is the aggregate of (I) the most recent Central Bank Rate for an RFR Business Day which is no more than five RFR Business Days before that RFR Lookback Day and (II) the applicable Central Bank Rate Adjustment and (b) 0.00%.

“Daily Simple SOFR Rate” means, for any day (a “SOFR Rate Day”), a rate per annum equal to SOFR for the day (such day “SOFR Determination Date”) that is five (5) RFR Business Days prior to (i) if such SOFR Rate Day is an RFR Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not an RFR Business Day, the RFR Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. If by 5:00 pm (New York City time) on such SOFR Determination Date, SOFR in respect of such SOFR Determination Date has not been published by the SOFR Administrator and a Benchmark Replacement Date with respect to SOFR has not occurred, then SOFR for such SOFR Determination Date will be SOFR as published in respect of the first preceding RFR Business Day for which such SOFR was published by the SOFR Administrator. Any change in Daily Simple SOFR Rate due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrowers; provided that the Administrative Agent shall use commercially reasonable efforts to promptly notify the Borrower of any such change.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, the CCAA, the BIA, the WURA and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, judicial management, reorganization, or similar debtor relief Laws (such laws include any applicable corporations legislation to the extent the relief sought under such corporations legislation relates to or involves the compromise, settlement, adjustment or arrangement of debt) of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

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

“Default Rate” means an interest rate equal to (after as well as before judgment), (a) with respect to any overdue principal for any Loan, the applicable interest rate for such Loan plus 2.00% per annum (provided that with respect to EurocurrencyTerm Benchmark Rate Loans, RFR Loans and BA Equivalent Loans, the determination of the applicable interest rate is subject to Section 2.02(c) to the extent that EurocurrencyTerm Benchmark Rate Loans, RFR Loans or BA Equivalent Loans may not be converted to, or continued as, EurocurrencyTerm Benchmark Rate Loans, RFR Loans or BA Equivalent Loans, as applicable, pursuant thereto), (b) with respect to any other overdue amount, including overdue interest (other than overdue interest owing by the Canadian Borrower), the interest rate applicable to Base Rate Loans plus 2.00% per annum, and (c) with respect to overdue interest owing by the Canadian Borrower, the interest rate applicable to Canadian Base Rate Loans plus 2.00% per annum, in each case, to the fullest extent permitted by applicable Laws.

“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of Letters of Credit within three Business Days of the date required to be funded by it hereunder, (b) has notified the Borrower Representative or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or, solely with respect to a Revolving Credit Lender, under other agreements generally in which it commits to extend credit, (c) has failed, within three Business Days after reasonable request by the Administrative Agent or any Borrower, as applicable, to confirm in a manner satisfactory to the Administrative Agent or such Borrower, as applicable, that it will comply with its funding obligations (provided that the Administrative Agent shall request such confirmation upon reasonable request from any L/C Issuer; provided further that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such confirmation by the Administrative Agent) or (d) has, or has a direct or indirect parent company that has, other than via an Undisclosed Administration, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment or (iv) become the subject of a Bail-In Action; provided that no Lender shall be a Defaulting Lender solely by virtue of (x) the ownership or acquisition by a Governmental Authority of any Equity Interest in that Lender or any direct or indirect parent company thereof so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender, or (y) the occurrence of any of the events described in clause (d)(i), (d)(ii) or (d)(iii) of this definition which in each case has been dismissed or terminated prior to the date of this Agreement. Any determination by the Administrative Agent (or the Required Lenders to the extent that the Administrative Agent is a Defaulting Lender) that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) upon delivery of written notice of such determination to the Administrative Agent, the Borrower Representative, each L/C Issuer and each Lender, as applicable.

 

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“Deferred Prepayment Date” has the meaning specified in the first paragraph of Section 2.05(b)(i).

“Deposit Account” has the meaning given such term in the UCC.

“Deposit Account Bank” means a financial institution at which the Loan Parties maintain a Deposit Account.

“Deposit Account Control Agreement” means, with respect to a Deposit Account or Securities Account, an agreement, in form and substance that is reasonably satisfactory to the Administrative Agent establishing the Collateral Agent’s exclusive Control (as defined in the UCC or the PPSA, as applicable) of such Deposit Account or Securities Account to be executed by each institution maintaining a Deposit Account, Securities Account or Cash Collateral Account (other than an Excluded Deposit Account) for any Borrower or any other Loan Party, in each case as required by and in accordance with the terms of Section 6.24; provided that, for the avoidance of doubt, (x) such control may only be exercised after the receipt by the relevant institution maintaining the relevant Deposit Account, Securities Account or Cash Collateral Account of a Blockage Notice from the Administrative Agent and (y) where perfection by Control over Deposit Accounts is not legally possible in a relevant jurisdiction, “Deposit Account Control Agreement” shall mean a blocked account control agreement in form and substance that is reasonably satisfactory to the Administrative Agent in respect of a particular Deposit Account.

“Designated Engines” means the Engines owned by any Loan Party that are identified on Schedule 11 of the Perfection Certificate, as such schedule may be updated by the delivery to the Collateral Agent from time to time of a Perfection Certificate Supplement.

“Designated Non-Cash Consideration” means the Fair Market Value of non-cash consideration received by any Borrower Party in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower Representative, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-Cash Consideration.

“Designated Preferred Stock” means Preferred Stock of Holdings or any Parent Holding Company, as applicable (other than Excluded Equity), that is issued after the Closing Date for cash and is so designated as Designated Preferred Stock, pursuant to an officer’s certificate of the Borrower Representative, on the issuance date thereof, the cash proceeds of which are contributed to the capital of the U.S. Borrower (if issued by Holdings or any Parent Holding Company).

“Designation Date” has the meaning specified in Section 2.19(f).

“Dilution” means for any period with respect to any Loan Party, the fraction, expressed as a percentage, the numerator of which is the aggregate amount of reductions in the Accounts of such Loan Party for such period other than by reason of dollar (or other currency) for dollar (or such other currency) cash payment and the denominator of which is the aggregate dollar (or other currency) amount of the sales of such Loan Party for such period.

“Dilution Reserve” means on any date of determination, a reserve established and revised from time to time by the Collateral Agent in such amount as it may determine in its Permitted Discretion reflects the Dilution as of any date with respect to the Accounts for the immediately preceding 12-month period, to the extent such Dilution exceeds 5%.

 

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“Disposition” or “Dispose” has the meaning specified in the definition of “Asset Sale”.

“Disqualified Institution” means (a) each person identified as a “Disqualified Institution” on a list delivered to the Administrative Agent by U.S. Borrower on or prior to December 16, 2018 (and, on and after the Closing Date, as such list may be updated with the Administrative Agent’s consent (such consent not to be unreasonably withheld, conditioned or delayed)), (b) any Company Competitor identified on a list delivered to the Administrative Agent by the Borrower Representative from time to time and (c) as to any entity referenced in each of clauses (a) and (b) above (the “Primary Disqualified Institution”), any of such Primary Disqualified Institution’s known Affiliates or Affiliates identified in writing to the Administrative Agent from time to time or otherwise readily identifiable as such by name, but excluding any Affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which the Primary Disqualified Institution does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity; provided that any additional designation permitted by the foregoing shall not apply retroactively to any prior assignment to any Lender or Participant. Notwithstanding the foregoing, any list of Disqualified Institutions shall only be required to be available to any Lender or Participant or prospective Lender or Participant on the Platform or another similar electronic system (i) to the extent the Borrower Representative desires to prevent any such Disqualified Institution from being a Lender or Participant or (ii) upon written request by such Lender or Participant or prospective Lender or Participant. For the purpose of clauses (a) and (b) in the previous sentence, such list shall be made available to the Administrative Agent pursuant to Section 10.02 and any additions, deletions or other modifications to the list of Disqualified Institutions shall become effective within three Business Days after delivery to the Administrative Agent.

“Disqualified Stock” means, with respect to any Person, any Equity Interests of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is puttable, redeemable or exchangeable), in each case, at the option of the holder thereof or upon the happening of any event:

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Equity Interests than the asset sale and change of control provisions applicable to the Senior Notes (as in effect on the date hereof) and any purchase requirement triggered thereby may not become operative until compliance with, in the case of an asset sale, the provisions of Section 7.04 or, in the case of a change of control, the repayment in full of the Obligations),

(2) is convertible or exchangeable for Indebtedness or Disqualified Stock, or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in each case prior to the date that is 91 days after the Latest Maturity Date of the Term Loans at the time of issuance of the respective Disqualified Stock; provided that only the portion of Equity Interests that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, that if such Equity Interests are issued to any employee or to any plan for the benefit of employees of the U.S. Borrower or its Subsidiaries or a direct or indirect parent of the U.S. Borrower or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because it may be required to be repurchased by the U.S. Borrower or its Subsidiaries or a direct or indirect parent of the U.S. Borrower in order to satisfy applicable statutory or regulatory obligations or as a result of such

 

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employee’s termination, death or disability; provided, further, that any class of Equity Interests of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Equity Interests that are not Disqualified Stock shall not be deemed to be Disqualified Stock.

Notwithstanding the foregoing, if any Disqualified Stock matures, or becomes redeemable, convertible or exchangeable pursuant to any of the preceding clauses (1), (2) or (3) within 91 days of the Latest Maturity Date of the Revolving Credit Loans, then the Maturity Date with respect to all Commitments or Revolving Credit Loans maturing later than 91 days prior to such Disqualified Stock matures, or becomes redeemable, convertible or exchangeable shall be deemed to be the date that is 91 days prior to such Disqualified Stock matures, or becomes redeemable, convertible or exchangeable.

“Dollar” and “$” mean lawful money of the United States.

“Dollar Amount” means, at any time:

(a) with respect to any Loan or Letter of Credit denominated in Dollars, the principal amount thereof then outstanding (or in which such participation is held);

(b) with respect to any Loan denominated in an Alternative Currency or other currency other than Dollars, the principal amount thereof then outstanding in the relevant Alternative Currency, converted to Dollars in accordance with Section 1.08; and

(c) in relation to any Letter of Credit denominated in an Alternative Currency, the principal amount of L/C Obligations in respect thereof converted to Dollars at the Spot Rate at the time of issuance of any Letter of Credit and as of the first Business Day of each calendar month thereafter so long as such Letter of Credit remains outstanding.

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

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

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

“Eligible Accounts” means, at any time, the Accounts of a Loan Party; provided, however, that Eligible Accounts shall not include any Account:

(a) which is not subject to a first priority perfected security interest in favor of Collateral Agent;

(b) which is subject to any Lien other than a Permitted Lien;

(c) which is (i) unpaid more than 60 days after the original due date therefor, or if no payment date is specified, more than 90 days after the date of the original invoice therefor, or (ii) with dated terms of more than 120 days from the invoice date (or 180 days in the case of Investment Grade

 

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Eligible Accounts or other Accounts reasonably satisfactory to the Collateral Agent, provided that Accounts meeting the criteria of this parenthetical clause may not at any time exceed 15% of the applicable Borrowing Base), or (iii) which has been written off the books of the Loan Parties or otherwise designated as uncollectible, unless, in each case, such Account is backed by (i) a letter of credit acceptable to the Collateral Agent which is in the possession of the Collateral Agent, is directly drawable by the Collateral Agent and, with respect to which the Collateral Agent has “control” as defined in Section 9-107 of the Uniform Commercial Code or possession directly or through an agent on its behalf under the PPSA or (ii) credit insurance or similar credit support acceptable to the Collateral Agent; provided, further, that any such Accounts backed by such credit insurance or similar credit support shall be deemed to be Eligible Accounts only to the extent of such credit insurance, net of any deductible;

(d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible under this Agreement pursuant to clause (c) above;

(e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to the Loan Parties exceeds 20% (or 40% in the case of Investment Grade Eligible Accounts) of the aggregate Eligible Accounts of all Loan Parties, as the case may be;

(f) with respect to which any representation, or warranty contained in any Loan Document has been breached or is not true in all material respects;

(g) which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other form of documentation that is satisfactory to the Collateral Agent which has been sent to the Account Debtor (other than goods shipped but not invoiced so long as such ship date is no more than thirty (30) days prior to the applicable Borrowing Base Certificate), (iii) represents a progress billing, (iv) is contingent upon such Loan Party’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis, or (vi) relates to payments of interest;

(h) for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by such Loan Party or to the extent such Account was invoiced more than once;

(i) with respect to which any check or other accepted instrument of payment has been returned uncollected for any reason;

(j) which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, interim receiver, creditor’s representative, custodian, trustee, monitor, administrator, sequestrator or liquidator of its assets, (ii) had possession of all or a material part of its property taken by any receiver, interim receiver, creditor’s representative, custodian, trustee, monitor, administrator, sequestrator or liquidator, (iii) filed, or had filed against it, any request, proposal or petition for ad hoc proceeding, liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under Title 11 of the United States Code, as now constituted or hereafter amended, any Debtor Relief Laws or any other U.S. federal, or state, Canadian federal or provincial, or foreign bankruptcy, insolvency, receivership or similar law, (iv) admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business, in each case only to the extent such condition is continuing;

 

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(k) which is owed by any Account Debtor which has sold all or substantially all of its assets;

(l) which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or Canada or an Approved Foreign Jurisdiction, or (ii) is not organized under applicable law of the U.S., any state of the U.S., Canada or any province or territory of Canada or an Approved Foreign Jurisdiction unless, in each case, such Account is backed by (i) a letter of credit acceptable to the Collateral Agent which is in the possession of the Collateral Agent, is directly drawable by the Collateral Agent and, with respect to which the Collateral Agent has “control” as defined in Section 9-107 of the Uniform Commercial Code or possession directly or through an agent on its behalf under the PPSA or (ii) credit insurance or similar credit support acceptable to the Collateral Agent (in each case, other than Account Debtors of Investment Grade Eligible Accounts or other Account Debtors otherwise satisfactory to the Collateral Agent, provided that such Accounts may not at any time exceed 15% of the applicable Borrowing Base); provided, further, that any such Accounts backed by such credit insurance or similar credit support shall be deemed to be Eligible Accounts only to the extent of such credit insurance, net of any deductible;

(m) which is owed in any currency other than Dollars, Canadian Dollars, Pounds Sterling or the euro (€);

(n) which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the federal government of the U.S. or Canada unless such Account is backed by a letter of credit acceptable to the Collateral Agent in its Permitted Discretion and, if reasonably requested by the Collateral Agent, which is in the possession of, and is directly drawable by, Collateral Agent, (ii) the Federal government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940 (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the first priority Lien of the Collateral Agent in such Account have been complied with to the Collateral Agent’s reasonable satisfaction or (iii) the federal government of Canada unless the Financial Administration Act (Canada) has been complied with to the Collateral Agent’s reasonable satisfaction in their Permitted Discretion;

(o) which is owed by any Affiliate (excluding any portfolio companies of the Sponsor), employee, officer or director of any Loan Party;

(p) which is owed by an Account Debtor to which such Loan Party is indebted, but only to the extent of such Indebtedness or is subject to any adverse security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor (a “Conditional Account”), in each case to the extent thereof; provided that no Conditional Account that otherwise constitutes an Eligible Account shall be rendered ineligible by virtue of this clause (p) to the extent, but only to the extent, that (x) the Account Debtor’s right of setoff is limited by an agreement that is reasonably satisfactory to the Administrative Agent in its Permitted Discretion or (y) an engine owned by such Account Debtor arising under an Account other than such Conditional Account shall at all times be under sole control or in the physical possession of a Loan Party, and such Loan Party determines that (i) such engine is subject to, or could be made subject to, an operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens or similar remedies arising by operation of law or otherwise enforceable in favor of such Loan Party in the ordinary course of business, and (ii) such engine has a fair market value (determined in good faith by such Loan Party) in excess of the amounts owed to such Loan Party under such other Account plus such Conditional Account; provided, further, that the Administrative Agent, in its Permitted Discretion, may permit the Loan Parties to report an estimated amount of Conditional Accounts to the extent the aggregate amount of estimated Conditional Accounts does not exceed 6% of the aggregate Eligible Accounts;

 

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(q) which is (i) Bonded Accounts Receivable or (ii) subject to any counterclaim, deduction, defense, setoff or dispute (including with respect to any Accounts comprised in any part of accounts receivable affecting original equipment manufacturer warranties) but only to the extent of any such counterclaim, deduction, defense, setoff or dispute; provided, that no Account that otherwise constitutes an Eligible Account shall be rendered ineligible by virtue of this clause (q)(ii) to the extent, but only to the extent, that the Account Debtor’s right of setoff is limited by an agreement that is reasonably satisfactory to the Collateral Agent in its Permitted Discretion;

(r) which is evidenced by any promissory note, bill of exchange, chattel paper, or instrument;

(s) with respect to which such Loan Party has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Loan Party created a new receivable for the unpaid portion of such Account; provided, that only the amount of the reduction of any such Account shall be deemed ineligible by virtue of this clause (s);

(t) which does not comply in all material respects with the requirements of all applicable laws and regulations, whether federal, state, provincial, territorial or local;

(u) which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates any party other than such Loan Party as payee or remittance party;

(v) as to which the contract or agreement underlying such Account is governed by (or, if no governing law is expressed therein, is deemed to be governed by) the laws of any jurisdiction other than the United States, any state thereof or the District of Columbia, or Canada or any province or territory thereof;

(w) with respect to which the Account Debtor is a Sanctioned Person or located in a Sanctioned Country;

(x) which the Collateral Agent, determines may not be paid by reason of the Account Debtor’s inability to pay or which the Collateral Agent otherwise determines is unacceptable in its Permitted Discretion;

(y) any Accounts to the extent representing amounts due in respect of “Cores”; or

(z) any Accounts that have been repurchased pursuant to a Receivables Repurchase Obligation or have otherwise been previously subject to a Qualified Receivables Factoring or Qualified Receivables Financing or have been previously sold to a Receivables Subsidiary.

provided that no Account acquired in any Investment permitted hereunder after the Closing Date shall be considered for inclusion as an Eligible Account until a collateral review of such Account shall have been performed by the Collateral Agent or its representatives (the fees and expenses associated with such review to be paid by the relevant Loan Party in accordance with the terms of this Agreement) and, therefore, for the avoidance of doubt, shall not be required to be set forth in any Borrowing Base Certificate until such time as such collateral review of such Account has been performed.

 

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In determining the amount of an Eligible Account, the face amount of an Account may, in the Administrative Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Loan Party may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by such Loan Party to reduce the amount of such Account.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.07(b) (subject to receipt of such consents, if any, as may be required for the assignment of the applicable Loan and/or Commitments to such Person under Section 10.07(b)(iii)).

“Eligible Cash” means, with respect to any Person, unrestricted cash and Cash Equivalents of such Person in each case that is on deposit in a Deposit Account or Securities Account, as applicable, that is (i) established with the Administrative Agent, the Collateral Agent or any Revolving Credit Lender, (ii) subject to a Deposit Account Control Agreement in favor of the Collateral Agent in a form reasonably acceptable to the Collateral Agent in its Permitted Discretion, (iii) not subject to any Liens other than (to the extent not prior to the Collateral Agent’s Lien thereon) (x) Permitted Liens, (y) Liens pursuant to any Loan Document and (z) junior priority Liens in favor of or pursuant to the Fixed Asset Credit Agreement and the credit documents related thereto and (iv) included in the cash balance report delivered to the Administrative Agent pursuant to Section 6.02(k); provided that if the subject account is held at an institution other than the Administrative Agent, the Collateral Agent or any of their affiliates, at any time that (x) a Credit Extension is requested, (y) the Payment Conditions are tested or (z) a Borrowing Base Certificate is delivered, the Administrative Agent reserves the right to verify the balance of such account; provided, further, that no such verification shall relieve any Lender of its obligation to make any Credit Extensions on a timely basis in accordance with the provisions of this Agreement.

“Eligible Parts Inventory” means, at any time, the Inventory of a Loan Party that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by the Collateral Agent in its Permitted Discretion to address the results of any audit or appraisal performed by them from time to time after the Closing Date. In determining the amount to be so included, Inventory shall be valued at the lower of cost or market value on a basis consistent with Loan Parties’ historical accounting practices. Eligible Parts Inventory shall not include any Inventory:

(a) which is not subject to a first priority perfected Lien in favor of the Collateral Agent governed by the laws of the jurisdiction in which such Inventory is located;

(b) which is subject to any Lien other than a Permitted Lien;

(c) which is, in any Collateral Agent’s Permitted Discretion, determined to be unmerchantable, defective or unfit for sale or is classified in any Borrower’s records or ledger as “unmachined”;

(d) with respect to which any covenant, representation, or warranty contained in this Agreement or any Security Agreement has been breached or is not true in any material respect;

(e) in which any Person other than any Loan Party shall have any direct or indirect ownership, interest or claim to title;

 

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(f) which constitutes work-in-process (including any Inventory allocated to, being employed in, or currently held for use in connection with, any Permitted Eligible Parts Installation or Permitted Engine Installation) or raw materials, supplies, inventory designated as (i) research and development parts, (ii) engineered parts, (iii) quarantined goods, or (iv) other similar items dedicated for internal use by the Loan Parties, bill-and-hold goods, goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business;

(g) which (i) is not located in (A) with respect to Inventory owned by a U.S. Loan Party, the United States or (B) with respect to Inventory owned by a Canadian Loan Party, the United States or Canada or (ii) is in transit with a common carrier from vendors and suppliers; provided that, Inventory in transit from vendors, processors and suppliers of the U.S. Loan Parties and Canadian Loan Parties may be included as Eligible Parts Inventory despite the foregoing provision of this clause (g)(ii) so long as:

(A) such Inventory has been shipped for receipt by the applicable Loan Party within forty-five (45) days of the date of shipment, but which has not yet been delivered to or on behalf of such Loan Party,

(B) the Collateral Agent shall have received evidence of satisfactory insurance consistent with Section 6.07 hereof,

(C) if the bill of lading is non-negotiable, the Inventory must be in transit within the U.S. or Canada, as applicable, and the Collateral Agent shall have received, if requested, a duly executed Access Agreement in favor of the Collateral Agent, in form and substance reasonably satisfactory to the Collateral Agent, from the applicable customs broker, freight forwarder or carrier for such Inventory,

(D) if the bill of lading is negotiable, the Collateral Agent shall have received (1) confirmation that the bill is issued in the name of such Loan Party and consigned to the order of any Collateral Agent, and an acceptable agreement has been executed with such Loan Party’s customs broker, in which the customs broker agrees that it holds the negotiable bill as Agent for the Collateral Agent and has granted the Collateral Agent access to the Inventory, (2) confirmation that the Loan Party has paid for the goods, and (3) an estimate from the Loan Party of the customs duties and customs fees associated with the Inventory in order to establish an appropriate Reserve, and

(E) the common carrier is not an affiliate of the applicable vendor or supplier;

(h) which is located on any real property leased by such Loan Party or in a third party warehouse unless, in each case, it is subject to a Access Agreement in form and substance satisfactory to the Collateral Agent in its Permitted Discretion executed by the lessor or warehouseman, as the case may be (provided, however, that, (x) during the 90-day period immediately following the Closing Date, such leased real property or warehouse need not be subject to a Access Agreement, and (y) during all times thereafter, either such leased real property or warehouse must be subject to a Access Agreement, or if such leased real property or warehouse is not subject to a Access Agreement, the failure to have a Access Agreement will not, in and of itself, render the Inventory ineligible, but the Collateral Agent may, at its election, establish a reserve against the applicable Borrowing Base in an aggregate amount equal to two (2) months’ rent under the lease for each location (or, if applicable, 2 months of storage fees under the warehouse agreement for each warehouse) that is not subject to a Access Agreement);

 

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(i) which is in the possession of a bailee or customer and is not evidenced by a Document (as defined in the UCC) (other than bills of lading to the extent permitted pursuant to clause (g) above), unless (i) such bailee or customer has delivered to the Collateral Agent an Access Agreement and such other documentation as the Collateral Agent may require in its Permitted Discretion, in each case in form and substance satisfactory to the Collateral Agent or (ii) an appropriate Reserve has been established by the Collateral Agent in its Permitted Discretion;

(j) which is being processed offsite by a third party at a third party location or outside processor, or is in transit to or from such third party location or outside processor (other than to the extent permitted pursuant to clause (g) or (h) above);

(k) which is a discontinued product or component thereof;

(l) which is the subject of a consignment by such Loan Party as consignor;

(m) which contains or bears any intellectual property rights licensed to such Loan Party by any Person other than a Loan Party unless the Collateral Agent is satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement;

(n) which is not reflected in a current perpetual inventory report of such Loan Party (unless such Inventory is reflected in a report to the Collateral Agent as “in transit” Inventory);

(o) for which reclamation or similar rights have been asserted by the seller;

(p) which is located at any location where the aggregate value of all Eligible Parts Inventory of the Loan Parties at such location is less than $250,000;

(q) which is in transit to or from a location of a Loan Party (other than in-transit from one location of a Loan Party to another location of a Loan Party, or except as otherwise specifically included pursuant to clause (g) above; or

(r) which the Collateral Agent, acting in consultation with a third party appraiser satisfactory to the Collateral Agent, otherwise determine is unacceptable in their Permitted Discretion;

provided, that no Inventory acquired in any Investment permitted hereunder after the Closing Date shall be considered for inclusion as Eligible Parts Inventory until (i) a collateral review of such Inventory shall have been performed by the Collateral Agent or its representatives (the fees and expenses associated with such review to be paid by the relevant Loan Party in accordance with the terms of this Agreement) and (ii) the Collateral Agent shall have received a third party appraisal of such Inventory in form and substance, and prepared by an independent appraisal firm, reasonably satisfactory to the Collateral Agent (the fees and expenses associated with such appraisal to be paid by the relevant Loan Party in accordance with the terms of this Agreement) and, therefore, for the avoidance of doubt, shall not be required to be set forth in any Borrowing Base Certificate until such time as such collateral review and third party appraisal of such Inventory has been performed.

“Eligible Rental Engines” means the Designated Engines of the Loan Parties consistent with the Loan Parties’ historical business practices and acceptable to the Administrative Agent in its Permitted Discretion so long as they comply with each of the representations and warranties respecting Eligible Rental Engines made in the Loan Documents, and are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by the Collateral Agent in its Permitted Discretion to address the results of any audit or appraisal

 

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performed by the Collateral Agent from time to time after the Closing Date. In determining the amount to be so included, Engines shall be valued at the lower of cost or market on a basis consistent with Loan Parties’ historical accounting practices. An Engine shall not be included in Eligible Rental Engines if:

(a) a Loan Party does not have good, valid, and marketable title thereto;

(b) unless such Engine is attached to one of the Aircraft operated by customers of a Loan Party in an Approved Foreign Jurisdiction as a result of a Permitted Engine Installation and is the subject of a Permitted Lease and located in an Approved Foreign Jurisdiction, it is not located at one of the locations identified on Schedule 1.01(d) or otherwise deemed acceptable by the Collateral Agent;

(c) unless otherwise specifically deemed to be Eligible Rental Engines pursuant to clauses (b), (d) or (j) of this definition, it is in the possession or control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, or mechanic (in each case that is not a Loan Party), or other third person;

(d) it is located on real property leased by a Loan Party or in a contract warehouse, in each case, (i) unless it is subject to a Access Agreement in form and substance satisfactory to the Collateral Agent in its Permitted Discretion executed by the lessor or warehouseman, as the case may be (provided, however, that, (x) during the 90-day period immediately following the Closing Date, such leased real property or contract warehouse need not be subject to a Access Agreement, and (y) during all times thereafter, either such leased real property or contract warehouse must be subject to a Access Agreement, or if such leased real property or contract warehouse is not subject to a Access Agreement, the failure to have a Access Agreement will not, in and of itself, render the Engine ineligible, but the Collateral Agent may, at its election, establish a reserve against the applicable Borrowing Base in an aggregate amount equal to two (2) months’ rent under the lease for each location (or, if applicable, 2 months of storage fees under the warehouse agreement for each contract warehouse) that is not subject to a Access Agreement), and (ii) unless it is segregated or otherwise separately identifiable from Engines of others, if any, stored on the premises;

(e) it is (i) not subject to a first priority perfected Lien in favor of the Collateral Agent and/or (ii) subject to any Lien other than a Permitted Lien;

(f) it is the subject of any warehouse receipt or other document of title, unless such receipt or other document of title is delivered to the Collateral Agent with all necessary endorsements,

(g) it is beyond economic repair or obsolete, or has not been maintained consistently in accordance with the FARs and the Maintenance Program,

(h) it is not of good and merchantable quality, free from defects, in good operating condition and ready for immediate use or operation in accordance with the Maintenance Program,

(i) it does not have (i) all required FAA (if applicable) or other applicable Aviation Authority serviceability tags (if serviceable) or record (or, if applicable, full back-to-birth traceability), or (ii) all manuals, documents, and records required by the FARs, any other applicable Aviation Authority or the Maintenance Program, or

(j) unless such Engine is attached to one of the Aircraft operated by customers of the Loan Parties in an Approved Foreign Jurisdiction as a result of a Permitted Engine Installation and is the subject of a Permitted Lease in an Approved Foreign Jurisdiction, it has been installed on any Aircraft or any other item of Equipment or otherwise become an accession, or is the subject of a pooling, exchange, borrowing, leasing, consignment, or other similar arrangement.

 

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provided, that no Engine acquired in any Investment permitted hereunder after the Closing Date shall be considered for inclusion as an Eligible Rental Engine until (i) a collateral review of such Engine shall have been performed by the Collateral Agent or its representatives (the fees and expenses associated with such review to be paid by the relevant Loan Party in accordance with the terms of this Agreement) and (ii) the Collateral Agent shall have received a third party appraisal of such Engine in form and substance, and prepared by an independent appraisal firm, reasonably satisfactory to the Collateral Agent (the fees and expenses associated with such appraisal to be paid by the relevant Loan Party in accordance with the terms of this Agreement) and, therefore, for the avoidance of doubt, shall not be required to be set forth in any Borrowing Base Certificate until such time as such collateral review and third party appraisal of such Engine has been performed.

“Eligible WIP Inventory” means(a) Inventory of the Loan Parties consisting of work-in-process which satisfies all of the criteria for Eligible Parts Inventory but for the fact that it is work-in-process Inventory in connection with an ongoing Permitted Eligible Parts Installation or Permitted Engine Installation, and is not Inventory of the types set forth on Exhibit N as deemed excluded and/or (b) labor and other charges (internal or external) allocated to a Permitted Eligible Parts Installation and/or Permitted Engine Installation in a manner consistent with past practices of the Loan Parties; provided that such Permitted Eligible Parts Installation or Permitted Engine Installation must (i) be subject to a confirmed written purchase order, contract, invoice or other document approved by both the applicable Borrower and the customer and (ii) not yet be shipped. In determining the amount to be so included, Eligible WIP Inventory shall be (i) in the case of clause (a), valued at the lower of cost or market, and (b) in the case of clause (b), calculated in good faith, in each case on a basis consistent with Loan Parties’ historical accounting practices, and shall not include any progress billings or unearned revenue with respect to such Eligible WIP Inventory; provided that no Inventory acquired in any Investment permitted hereunder after the Closing Date shall be considered for inclusion as Eligible WIP Inventory until (i) a collateral review of such Inventory shall have been performed by the Collateral Agent or its representatives (the fees and expenses associated with such review to be paid by the relevant Loan Party in accordance with the terms of this Agreement) and (ii) the Collateral Agent shall have received a third party appraisal of such Inventory in form and substance, and prepared by an independent appraisal firm, reasonably satisfactory to the Collateral Agent (the fees and expenses associated with such appraisal to be paid by the relevant Loan Party in accordance with the terms of this Agreement) and, therefore, for the avoidance of doubt, shall not be required to be set forth in any Borrowing Base Certificate until such time as such collateral review and third party appraisal of such Inventory has been performed.

“EMU” means the economic and monetary union as contemplated in the EU Treaty.

“EMU Legislation” means the legislative measures of the EMU for the introduction of, changeover to, or operation of the Euro in one or more member states.

“Engine” means an “aircraft engine” as defined in Section 40102 of the Federal Aviation Act, an auxiliary power unit, an engine module or another type of engine.

“Entitlement Holder” has the meaning given such term in the UCC.

“Entitlement Order” has the meaning given such term in the UCC.

 

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“Environment” means ambient air, indoor air, surface water, groundwater, drinking water, land surface, sediments, and subsurface strata and natural resources such as wetlands, flora and fauna.

“Environmental Laws” means any and all applicable federal, state, provincial, territorial, local and foreign statutes, laws, including common law, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses or governmental restrictions relating to pollution, the protection of the Environment, and human health and safety (to the extent relating to exposure to Hazardous Materials), including those related to Hazardous Materials, air emissions and discharges to public pollution control systems.

“Environmental Liability” means any liability (including any liability for damages, costs of environmental remediation, monitoring or oversight by a Governmental Authority, fines, penalties or indemnities) directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage or treatment of any Hazardous Materials, (c) human exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the Environment or (e) any contract, agreement or other binding consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“Equipment” has the meaning specified in the U.S. Security Agreement, the meaning given to “equipment” in the Canadian Security Agreement and the meaning given to such term in each other Security Agreement, as applicable.

“Equity Contribution” has the meaning specified in the definition of “Transactions”.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any Capital Stock that arises only by reason of the happening of a contingency that is outside the control of the holder of such Capital Stock or any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equity Offering” means any public or private sale on or after the Closing Date of Capital Stock or Preferred Stock of the U.S. Borrower or any direct or indirect parent of the U.S. Borrower, as applicable (other than Disqualified Stock), other than:

(1) public offerings with respect to the U.S. Borrower’s or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8 or successor form thereto;

(2) issuances to any Subsidiary of the U.S. Borrower; and

(3) any such public or private sale that constitutes an Excluded Contribution or Refunding Capital Stock.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any Person who together with any Loan Party is treated as a single employer within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code) or Section 4001 of ERISA.

 

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“ERISA Event” means (a) a Reportable Event with respect to a Plan; (b) the withdrawal of any Loan Party or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is insolvent (within the meaning of Section 4245 of ERISA); (d) the filing of a written notice of intent to terminate or the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, respectively, (e) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan; (g) the determination that any Plan is considered an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; (h) the determination that any Multiemployer Plan is considered a plan in “endangered”, “critical”, or “critical and declining” status within the meaning of Section 432 of the Code or Section 305 of ERISA; (i) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (j) the conditions for the imposition of a Lien under Section 430(k) of the Code or Section 303(k) of ERISA shall have been met with respect to any Plan; or (k) any Foreign Benefit Event.

“Erroneous Payment” has the meaning specified in Section 9.19(a).

“Erroneous Payment Return Deficiency” has the meaning specified in Section 9.19(d).

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

“EU Treaty” means the Treaty on European Union.

“Euro” and “€” means the single currency of the Participating Member States introduced in accordance with the provisions of Article 109(i)4 of the EU Treaty.

“EurocurrencyEURIBOR Rate” means, in the case of any EurocurrencyEURIBOR Rate Loan denominated in Euros for any Interest Period:

(a) in the case of any Eurocurrency Rate Loan denominated in Dollars:

(a) (i) the rate per annum determined by the Administrative Agent to be the offered rate which appears on the page of the Reuters screen (or any successor thereto) which displays the Londoneuro interbank offered rate administered by ICE Benchmark Administration Limited the Banking Federation of the European Union (or any other person which takes over administration of that rate) (such page currently being the LIBOR01EURIBOR01 page) for deposits in DollarsEuros (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (LondonBrussels time), two Business Days prior to the first day of such Interest Period; and

(b) (ii) in the event the rate referenced in the preceding clause (a)(i) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum determined by the Administrative Agent to be the euro interbank offered rate on such other page or other service which displays the Screen Rate for deposits in Dollars (for delivery on the first day of such Interest Periodadministered by the Banking Federation of the European Union (or any other person which takes over administration of that rate) for the relevant Interest Period displayed on page EURIBOR01 of

 

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the Reuters screen (or any replacement Reuters page which displays that rate) with a term equivalent to such Interest Period in Euros, determined as of approximately 11:00 a.m. (LondonBrussels time) two Business Days prior to the first day of such Interest Period; and.

(iii) if Screen Rates are quoted under either of the preceding clause (a)(i) or (a)(ii), but there is no such quotation for the Interest Period elected, the Screen Rate shall be equal to the applicable Interpolated Screen Rate; or

If at any time the Administrative Agent reasonably determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in Section 3.04(a) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in Section 3.04(a) have not arisen but the supervisor or the administrator of the applicable interbank offered rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the applicable interbank offered rate shall no longer be used for determining interest rates for loans in any applicable currency, then the Administrative Agent and Holdings shall endeavor to establish an alternate benchmark floating term rate of interest to the EURIBOR Rate that is generally accepted as the then prevailing market convention for determining a rate of interest for similar syndicated loans in the United States at such time and shall include the spread or method for determining a spread or other adjustments or modifications that are generally accepted as the then prevailing market convention for determining such spread, method, adjustment or modification, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable. Notwithstanding anything to the contrary herein, such amendment shall become effective without any further action or consent of any other party to this Agreement; provided that if there is not a generally accepted prevailing market convention for determining a rate of interest for similar syndicated loans in the United States, then Holdings and the Administrative Agent may establish an alternate benchmark floating term rate of interest, which may include a spread or method for determining a spread or other adjustments or modifications, and such alternate rate of interest shall become effective within five Business Days of the date that notice of such alternate rate of interest is provided to the Lenders unless prior to the end of such five Business Day period the Administrative Agent receives a written notice from the Required Lenders of each Tranche stating that such Required Lenders object to such alternate rate of interest. For the avoidance of doubt, if any such alternate rate of interest determined pursuant to this paragraph would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“EURIBOR Rate Borrowing” means a Borrowing comprising EURIBOR Rate Loans.

“EURIBOR Rate Loan” means a Loan that bears interest at a rate based on the applicable Adjusted EURIBOR Rate.

“Eurocurrency Rate” means, in the case of any Eurocurrency Rate Loan denominated in Eurosan Alternative Currency other than Euros, Pounds Sterling and Canadian Dollars:

(a) (i) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate whichthat appears on the page of theapplicable Reuters screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited (or any successor thereto) which displays the euro interbank offered rate administered by the Banking Federation of the European Union (or any other person which takes over administration of that rate) (such page currently being the EURIBOR01 page) for deposits in Eurossuch Alternative Currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (BrusselsLondon time) two Business Days prior to the first day of such Interest Period; and

 

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(b) (ii) in the event the rate referenced in the preceding clause (b)(ia) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum reasonably determined by the Administrative Agent to be the offered rate on such other page or other service which displays the Screen Ratean offered rate administered by ICE Benchmark Administration Limited for deposits in such Alternative Currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period in Euros, determined as of approximately 11:00 a.m. (BrusselsLondon time) two Business Days prior to the first day of such Interest Period; and.

(iii) if Screen Rates are quoted under either of the preceding clause (b)(i) or (b)(ii), but there is no such quotation for the Interest Period elected, the Screen Rate shall be equal to the applicable Interpolated Screen Rate.

If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in Section 3.04(a) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in Section 3.04(a) have not arisen but the supervisor or the administrator of the London interbank offered rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the London interbank offered rate shall no longer be used for determining interest rates for loans in Dollars (or any otherapplicable currency, as applicable), then the Administrative Agent and Holdings shall endeavor to establish an alternate benchmark floating term rate of interest to the Eurocurrency Rate or BA Rate, as applicable that is generally accepted as the then prevailing market convention for determining a rate of interest for similar syndicated loans in the United States at such time and shall include the spread or method for determining a spread or other adjustments or modifications that are generally accepted as the then prevailing market convention for determining such spread, method, adjustment or modification, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable. Notwithstanding anything to the contrary herein, such amendment shall become effective without any further action or consent of any other party to this Agreement; provided that if there is not a generally accepted prevailing market convention for determining a rate of interest for similar syndicated loans in the United States, then Holdings and the Administrative Agent may establish an alternate benchmark floating term rate of interest, which may include a spread or method for determining a spread or other adjustments or modifications, and such alternate rate of interest shall become effective within five Business Days of the date that notice of such alternate rate of interest is provided to the Lenders unless prior to the end of such five Business Day period the Administrative Agent receives a written notice from the Required Lenders of each Tranche stating that such Required Lenders object to such alternate rate of interest. For the avoidance of doubt, if any such alternate rate of interest determined pursuant to this paragraph would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Eurocurrency Rate Borrowing” means a Borrowing comprising Eurocurrency Rate Loans.

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the applicable Adjusted Eurocurrency Rate.

“Event of Default” has the meaning specified in Section 8.01.

 

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“Excess Availability” means, as of any date of determination, an amount equal to the amount of Availability at such time.

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

“Excluded Accounts” means (1) payroll, healthcare and other employee wage and benefit accounts, (2) tax accounts, including, without limitation, sales tax accounts, (3) escrow, defeasance and redemption accounts, (4) fiduciary or trust accounts, (5) [reserved] and (6) the funds or other property held in or maintained for such purposes in any such account described in clauses (1) through (5).

“Excluded Contributions” means the net cash proceeds and Cash Equivalents, or the Fair Market Value of other assets, received by the U.S. Borrower after the Closing Date from:

(1) contributions to its common equity capital, and

(2) the sale of Capital Stock (other than Excluded Equity) of the U.S. Borrower,

in each case designated as Excluded Contributions pursuant to an officer’s certificate of a Responsible Officer, or that are utilized to make a Restricted Payment pursuant to clause (2) of the second paragraph of Section 7.05.

“Excluded Deposit Account” has the meaning specified in Section 6.24(a).

“Excluded Equity” means (i) Disqualified Stock, (ii) any Equity Interests issued or sold to a Restricted Subsidiary or any employee stock ownership plan or trust established by Holdings or any of its Subsidiaries or a direct or indirect parent of Holdings (to the extent such employee stock ownership plan or trust has been funded by Holdings or any Subsidiary or a direct or indirect parent of Holdings), (iii) any Equity Interest that has already been used or designated (x) as (or the proceeds of which have been used or designated as) a Cash Contribution Amount, Designated Preferred Stock, an Excluded Contribution or Refunding Capital Stock, or (y) to increase the amount available under clause (5)(a) of the second paragraph under Section 7.05 or clause (14) of the definition of “Permitted Investments” or is proceeds of Indebtedness referred to in clause (14)(b) of the second paragraph in Section 7.05 and (iv) the Equity Contribution.

“Excluded Property” means, with respect to any Loan Party or any direct or indirect Subsidiary of such Loan Party, (a) any real property, whether such real property be owned in fee or subject to any lease or sublease, (b) motor vehicles and other assets or goods subject to certificates of title to the extent a Lien thereon cannot be perfected by filing a UCC or PPSA financing statement (or analogous filing in the jurisdiction of the applicable Loan Party), (c) goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets to the extent a security interest in such goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets would result in material adverse tax consequences to the Borrower Parties (including, without limitation, as a result of any law or regulation in any applicable jurisdiction similar to Section 956 of the Code), or material adverse regulatory consequences, in each case, as reasonably determined by the Borrower Representative in writing to the Collateral Agent, (d) pledges of, and security interests in, certain goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets, in favor of the Collateral Agent which are prohibited by applicable Law; provided, that (i) any such limitation described in this clause (d) on the security interests granted under the Collateral Documents shall only apply to the extent that any such prohibition could not be rendered ineffective pursuant to the UCC or PPSA or any other applicable Law or principles of equity and shall not apply (where the UCC or

 

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PPSA is applicable) to any proceeds or receivables thereof, the assignment of which is expressly deemed effective under the UCC or PPSA notwithstanding such prohibition and (ii) in the event of the termination or elimination of any such prohibition contained in any applicable Law, a security interest in such goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets shall be automatically and simultaneously granted under the applicable Collateral Documents and shall be included as Collateral, (e) any governmental licenses (but not the proceeds thereof) or state, provincial, territorial or local franchises, charters and authorizations, to the extent security interests in favor of the Collateral Agent in such licenses, franchises, charters or authorizations are prohibited or restricted thereby, in each case, except to the extent such prohibition is unenforceable after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code of any applicable jurisdiction or PPSA and other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code of any applicable jurisdiction or PPSA notwithstanding such prohibition; provided that (i) any such limitation described in this clause (e) on the security interests granted shall only apply to the extent that any such prohibition or restriction could not be rendered ineffective pursuant to the Uniform Commercial Code of any applicable jurisdiction or PPSA or any other applicable Law or principles of equity and (ii) in the event of the termination or elimination of any such prohibition or restriction contained in any applicable license, franchise, charter or authorization, a security interest in such licenses, franchises, charters or authorizations shall be automatically and simultaneously granted under the applicable Collateral Documents and such licenses, franchises, charters or authorizations shall be included as Collateral, (f) Equity Interests in (A) any Person (other than the U.S. Borrower and Wholly Owned Restricted Subsidiaries of the U.S. Borrower) to the extent and for so long as the pledge thereof in favor of the Collateral Agent is not permitted by the terms of such Person’s joint venture agreement or other applicable Organization Documents; provided, that such prohibition exists on the Closing Date or at the time such Equity Interests are acquired (so long as such prohibition did not arise in contemplation of the Closing Date or such acquisition), (B) any not-for-profit Subsidiary, (C) any captive insurance Subsidiary, (D) any special purpose securitization vehicle (or similar entity), including any Receivables Subsidiary, (E) any Unrestricted Subsidiary, (F) any Person which is acquired after the date hereof to the extent and for so long as such Equity Interests are pledged in respect of Acquired Indebtedness and such pledge constitutes a Permitted Lien and (G) any Person that is an Excluded Subsidiary pursuant to clause (e) of the definition of “Excluded Subsidiary”, (g) any lease, license or other agreement or any goods or other property subject to a purchase money security interest, Capitalized Lease Obligation or similar arrangement in each case permitted to be incurred under this Agreement, to the extent that a grant of a security interest therein would violate or invalidate such lease, license, capital lease or agreement or purchase money arrangement or create a right of termination in favor of any other party thereto (other than a Loan Party or their Wholly Owned Subsidiaries), in each case, except to the extent such prohibition is unenforceable after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code or PPSA of any applicable jurisdiction, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code or PPSA of any applicable jurisdiction notwithstanding such prohibition, (h) “intent-to-use” trademark applications prior to the filing of a “Statement of Use” or “Amendment to Allege Use”, (i) any goods or assets sold pursuant to a Qualified Receivables Factoring or Qualified Receivables Financing or other factoring or receivables arrangement permitted hereunder, (j) any goods, chattel paper, investment property, documents of title, instruments, money, intangibles or other assets of (including Equity Interests held by) (A) any Controlled Non-U.S. Subsidiary or any direct or indirect subsidiary of a Controlled Non-U.S. Subsidiary, (B) any FSHCO, (C) any not-for-profit Subsidiary, (D) any captive insurance Subsidiary or (E) any special purpose securitization vehicle (or similar entity), including any Receivables Subsidiary (provided, that the foregoing clauses (j)(A) and (j)(B) shall apply with respect to the U.S. Obligations but not with respect to the Canadian Obligations), (k) Margin Stock, (l) cash to secure letter of credit reimbursement obligations to the extent such letters of credit are permitted by this Agreement (excluding Cash Collateral securing L/C Obligations under this Agreement), (m) Excluded Accounts, (n) the Acquisition Agreement

 

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and any rights therein or arising thereunder (except any proceeds or the rights to receive proceeds of the Acquisition Agreement), (o) Voting Stock in excess of 65% of the Voting Stock of any Controlled Non-U.S. Subsidiary or of any FSHCO (provided, that the foregoing clause (o) shall apply with respect to the U.S. Obligations but not with respect to the Canadian Obligations), (p) “consumer goods” (as defined in the PPSA) and (q) pledges of, and security interests in, manufacturer warranties relating to any Engine if the pledge of or granting of a security interest in such manufacturer warranty would require consent of the manufacturer or otherwise void or cause a default under such manufacturer warranty; provided, that (i) any such limitation described in this clause (q) on the security interests granted under the Collateral Documents shall only apply to the extent that any such consent right, rendering void or default could not be rendered ineffective pursuant to the UCC or PPSA or any other applicable Law or principles of equity and shall not apply (where the UCC or PPSA is applicable) to any proceeds or receivables thereof, the assignment of which is expressly deemed effective under the UCC or PPSA notwithstanding such consent right, rendering void or default and (ii) in the event of the termination or elimination of any such consent right, rendering void or default, a security interest in such manufacturer warranty shall be automatically and simultaneously granted under the applicable Collateral Documents and shall be included as Collateral. Notwithstanding the foregoing, with respect to the Canadian Obligations only, clauses (j)(A), (j)(B) and (o) above shall not apply to any goods, chattel paper, investment property, documents of title, instruments, money, intangibles or other assets of any Canadian Loan Party and any such goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets shall not constitute Excluded Property with respect to the Canadian Obligations unless they would otherwise be Excluded Property with respect to the Canadian Obligations as a result of any other clause of this definition. Other goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets shall be deemed to be “Excluded Property” if the Administrative Agent and the Borrower Representative agree in writing that the cost or other consequences of obtaining or perfecting a security interest in such goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets is excessive in relation to either the value of such goods, chattel paper, investment property, documents of title, instruments, money, intangibles and other assets as Collateral or to the benefit of the Lenders of the security afforded thereby. Notwithstanding anything herein or the Collateral Documents to the contrary, Excluded Property shall not include any Proceeds (as defined in the UCC or the PPSA, as applicable), substitutions or replacements of any Excluded Property (unless such Proceeds, substitutions or replacements would otherwise constitute Excluded Property referred to above).

“Excluded Subsidiary” means any direct or indirect Subsidiary of the U.S. Borrower that is (a) an Unrestricted Subsidiary, (b) not a Wholly Owned Restricted Subsidiary of the U.S. Borrower, (c) an Immaterial Subsidiary, (d) a FSHCO or Controlled Non-U.S. Subsidiary (or any direct or indirect Subsidiary of a FSHCO or Controlled Non-U.S. Subsidiary) (provided, that this clause (d) shall apply with respect to the U.S. Obligations but not with respect to the Canadian Obligations), (e) established or created pursuant to clause (14)(g) of the second paragraph of Section 7.05 and meeting the requirements of the proviso thereto; provided that such Subsidiary shall only be an Excluded Subsidiary for the period immediately prior to such acquisition, (f)(i) a Non-U.S. Subsidiary (provided, that this clause (f)(i) shall apply with respect to the U.S. Obligations but not with respect to the Canadian Obligations) and (ii) with respect to the Canadian Obligations, a Canadian Subsidiary for which the providing of a guarantee would reasonably be expected to result in a violation or breach of, or conflict with, fiduciary duties of such Canadian Subsidiary’s officers, directors, or managers, as reasonably determined by the Borrower Representative and notified in writing to the Administrative Agent, (g) a Subsidiary that is prohibited by applicable Law from guaranteeing the Facilities, or which would require governmental (including regulatory) consent, approval, license or authorization to provide a guarantee unless, such consent, approval, license or authorization has been received, (h) a Subsidiary that is prohibited from guaranteeing the Facilities by any Contractual Obligation in existence on the Closing Date (but not entered into in contemplation thereof) and is listed on Schedule 1.01(e) hereto and for so long as any such Contractual

 

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Obligation exists (or, in the case of any newly-acquired Subsidiary, in existence at the time of acquisition thereof but not entered into in contemplation thereof and for so long as any such Contractual Obligation exists), (i) a Subsidiary with respect to which a guarantee by it of the Facilities would result in material adverse tax consequences to any Borrower Party, as reasonably determined by the Borrower Representative and notified to the Administrative Agent in writing, (j) any Receivables Subsidiary, (k) not-for-profit subsidiaries, (l) [reserved], (m) Subsidiaries that are special purpose entities, (n) captive insurance subsidiaries and (o) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower Representative, the cost or other consequences (including adverse tax consequences) of guaranteeing the Facilities would be excessive in view of the benefits to be obtained by the Lenders therefrom; provided that if a Subsidiary executes the U.S. Guaranty or the Canadian Guaranty as a “Subsidiary Guarantor,” then it shall not constitute an “Excluded Subsidiary” (unless released from its obligations under the U.S. Guaranty or the Canadian Guaranty, as applicable, as a “Subsidiary Guarantor” in accordance with the terms hereof and thereof), except that a Subsidiary described in clause (d) or (f)(i) of this definition shall continue to constitute an “Excluded Subsidiary” with respect to the U.S. Obligations (but not with respect to the Canadian Obligations) even if it executes the Canadian Guaranty; provided, further, that no Subsidiary of the U.S. Borrower shall be an Excluded Subsidiary with respect to the U.S. Obligations or Canadian Obligations, as applicable, if such Subsidiary is a guarantor with respect to the Fixed Asset Facility or the Senior Notes, with respect to a borrower that is a U.S. Person or a Canadian Loan Party, as applicable, in each case, with an aggregate outstanding principal amount in excess of $150,000,000. Notwithstanding the foregoing, with respect to the Canadian Obligations only, clauses (d) and (f)(i) above shall not apply to any Canadian Subsidiary, and any such Canadian Subsidiary shall not constitute an Excluded Subsidiary with respect to the Canadian Obligations unless it would otherwise be an Excluded Subsidiary with respect to the Canadian Obligations as a result of any other clause of this definition.

“Excluded Swap Obligation” means, with respect to any Guarantor, (a) any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal 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) (i) by virtue of such Guarantor’s failure to constitute an “eligible contract participant,” as defined in the Commodity Exchange Act and the regulations thereunder (determined after giving effect to any applicable keepwell, support, or other agreement for the benefit of such Guarantor), at the time the guarantee of (or grant of such security interest by, as applicable) such Guarantor becomes or would become effective with respect to such Swap Obligation or (ii) in the case of a Swap Obligation that is subject to a clearing requirement pursuant to section 2(h) of the Commodity Exchange Act, because such Guarantor is a “financial entity,” as defined in section 2(h)(7)(C) the Commodity Exchange Act, at the time the guarantee of (or grant of such security interest by, as applicable) such Guarantor becomes or would become effective with respect to such Swap Obligation or (b) any other Swap Obligation designated as an “Excluded Swap Obligation” of such Guarantor as specified in any agreement between the relevant Loan Parties and Hedge Bank applicable to such Swap Obligation.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, branch profits Taxes and Canadian capital Taxes, in each case, (i) imposed as a result of such Recipient 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) in the case of a Lender, any U.S. federal withholding Taxes imposed pursuant to a Law in effect on the date on which such Lender acquires an interest in a Loan or Commitment (other than any Lender acquiring an interest in a Loan or Commitment pursuant to a request by any Loan Party under

 

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Section 3.08) or changes its lending office, except in each case to the extent that, pursuant to Section 3.01, additional amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changes its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(h), (d) any Taxes imposed under FATCA, (e) any withholding Taxes imposed on a payment by or on account of any obligation hereunder (i) to a Recipient with which the applicable Borrower does not deal at arm’s length (for the purposes of the ITA) at the time of making such payment or (ii) in respect of a debt or other obligation to pay an amount to a Recipient with whom the payer is not dealing at arm’s length (for the purposes of the ITA) at the time of such payment and (f) any Taxes imposed on any Recipient of any payment to be made by or on account of any obligation of the applicable Borrower hereunder by reason of such Recipient (i) being a “specified shareholder” (as defined in subsection 18(5) of the ITA) of the applicable Borrower or (ii) not dealing at arm’s length (for the purposes of the ITA) with a “specified shareholder” (as defined in subsection 18(5) of the ITA) of the applicable Borrower.

“Executive Order” means Executive Order No. 13224 of September 23, 2001, entitled Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)).

“Existing Credit Agreement Agent” has the meaning specified in clause (e) of the definition of “Transactions”.

“Existing DB Plan” has the meaning specified in Section 5.11(f).

“Existing Letters of Credit” means the letters of credit for the account of any Borrower Party issued prior to the Closing Date, in effect on the Closing Date and listed on Schedule 1.01(b).

“Existing Revolving Loans” has the meaning specified in Section 2.19(a).

“Existing Revolving Tranche” has the meaning specified in Section 2.19(a).

“Existing Term Loan Credit Agreement” has the meaning specified in clause (e) of the definition of “Transactions”.

“Existing Tranche” has the meaning specified in Section 2.19(a).

“Extendable Bridge Loans/Interim Debt” means customary “bridge” loans which by their terms will be converted into loans or other Indebtedness that have, or extended such that they have, a maturity date later than the Latest Maturity Date of all Revolving Credit Loan Tranches then in effect.

“Extended Loans Agent” has the meaning specified in Section 2.19(a).

“Extended Revolving Commitments” has the meaning specified in Section 2.19(a).

“Extended Revolving Loans” has the meaning specified in Section 2.19(a).

“Extended Revolving Tranche” has the meaning specified in Section 2.19(a).

“Extended Tranche” has the meaning specified in Section 2.19(a).

“Extending Lender” has the meaning specified in Section 2.19(b).

 

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“Extension” has the meaning specified in Section 2.19(b).

“Extension Amendment” has the meaning specified in Section 2.19(c).

“Extension Date” has the meaning specified in Section 2.19(d).

“Extension Election” has the meaning specified in Section 2.19(b).

“Extension Request” has the meaning specified in Section 2.19(a).

“FAA” means the Federal Aviation Administration and any successor governmental agency performing functions similar to those performed by the Federal Aviation Administration as of the Closing Date.

“FAA Act” means 49 U.S.C. Subtitle VII, §§ 40101 et seq., as amended from time to time, any regulations promulgated thereunder and any successor provision.

“FAA Registry” has the meaning specified in Section 6.20.

“Facility” means the Revolving Credit Facility or the Letter of Credit Sublimit, as the context may require.

“Factoring Transaction” means any transaction or series of transactions that may be entered into by any Borrower Party pursuant to which such Borrower Party may sell, convey, assign or otherwise transfer Receivables Assets (which may include a backup or precautionary grant of security interest in such Receivables Assets so sold, conveyed, assigned or otherwise transferred or purported to be so sold, conveyed, assigned or otherwise transferred) to any Person that is not a Restricted Subsidiary; provided that any such person that is a Subsidiary meets the qualifications in clauses (1) through (3) of the definition of “Receivables Subsidiary”.

“FARs” means the rules and regulations of the FAA, including as set forth in Title 14 of the Code of Federal Regulations.

“Fair Market Value” means, with respect to any asset or property, the price that could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction (as determined in good faith by the senior management or the Board of Directors of the U.S. Borrower, Holdings or any Parent Holding Company, whose determination will be conclusive for all purposes under the Loan Documents).

“FARs” means the rules and regulations of the FAA, including as set forth in Title 14 of the Code of Federal Regulations.

“FATCA” means Sections 1471 through 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), any current or future Treasury Regulations or official administrative interpretations thereof, any agreements entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or successor version described above), any intergovernmental agreement among Governmental Authorities implementing the foregoing and any fiscal or regulatory legislation, rules or practices adopted pursuant to any such intergovernmental agreement, treaty or convention.

 

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“Federal Aviation Act” means Title 49 of the United States Code, as amended from time to time, together with all rules, regulations, procedures, orders, handbooks, guidelines and interpretations thereunder or related thereto.

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

“Fee and Closing Payment Letter” means the Amended and Restated Credit Facilities Fee and Closing Payment Letter, dated January 10, 2019, by and among the Arrangers, certain of their respective affiliates, the Initial Principal Investors and the U.S. Borrower.

“Filing Collateral” has the meaning specified in Section 4.01.

“Financial Asset” has the meaning given to such term in the UCC.

“Financial Covenant” has the meaning specified in Section 7.08.

“First Amendment” means the First Amendment to ABL Credit Agreement, dated as of January 10, 2020, among Holdings, the Borrowers, the Subsidiary Guarantors party thereto (solely with respect to Section 6.2 thereof), the Administrative Agent, the Collateral Agent and the Lenders party thereto.

“Fitch” means Fitch Ratings, Inc. or any successor to the rating agency business thereof.

“Fixed Asset Facility” means, collectively, (i) the senior secured term loan facility and (ii) the senior secured revolving credit facility, in each case, under the Fixed Asset Credit Agreement or any amendment, supplement, modification, substitution, replacement, restatement or refinancing thereof, in whole or in part, pursuant to a Permitted Refinancing from time to time, in each case as and to the extent permitted by this Agreement and the ABL Intercreditor Agreement.

“Fixed Asset Credit Agreement” means the Fixed Asset Credit Agreement, dated as of the date hereof, among the U.S. Borrower and the Canadian Borrower, as borrowers, Holdings, the lenders party thereto from time to time and the Fixed Asset Representative, as amended, modified, supplemented, substituted, replaced, restated or refinanced, in whole or in part, pursuant to a Permitted Refinancing from time to time (whether with the original administrative agent and lenders or other agents and lenders or otherwise and whether provided under the original Fixed Asset Credit Agreement or another credit agreement, indenture, instrument, other document or otherwise, unless such credit agreement, indenture, instrument or document expressly provides that it is not a Fixed Asset Credit Agreement), in each case as and to the extent permitted by this Agreement and the ABL Intercreditor Agreement.

“Fixed Asset Documents” means, collectively, (i) the Fixed Asset Credit Agreement and (ii) the security documents, intercreditor agreements (including the ABL Intercreditor Agreement), guarantees, joinders and other agreements or instruments executed in connection with the Fixed Asset Credit Agreement or such other agreements, in each case, as amended, modified, supplemented, substituted, replaced, restated or refinanced, in whole or in part, pursuant to a Permitted Refinancing from time to time, in each case as and to the extent permitted by this Agreement and the ABL Intercreditor Agreement.

 

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“Fixed Asset Facility” means, collectively, (i) the senior secured term loan facility and (ii) the senior secured revolving credit facility, in each case, under the Fixed Asset Credit Agreement or any amendment, supplement, modification, substitution, replacement, restatement or refinancing thereof, in whole or in part, pursuant to a Permitted Refinancing from time to time, in each case as and to the extent permitted by this Agreement and the ABL Intercreditor Agreement.

“Fixed Asset Fixed Charge Coverage Ratio” has the meaning assigned to the term “Fixed Charge Coverage Ratio” in the Fixed Asset Credit Agreement as in effect on the Closing Date.

“Fixed Asset Obligations” means all Indebtedness and other obligations of the Borrowers and any other Loan Parties outstanding under or pursuant to the Fixed Asset Documents, together with guarantees thereof that are secured, or intended to be secured, under the Fixed Asset Documents, including any direct or indirect, absolute or contingent, interest and fees that accrue after the commencement by or against the Borrowers or any other Loan Party of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding, and any obligations under a Secured Hedge Agreement or a Secured Cash Management Agreement (in each case, as defined in the Fixed Asset Credit Agreement) that are secured pursuant to the Fixed Asset Documents.

“Fixed Asset Priority Collateral” has the meaning given to such term in the ABL Intercreditor Agreement.

“Fixed Asset Representative” means initially, Credit Suisse AG, Cayman Islands Branch, in its capacity as administrative agent and collateral agent under the Fixed Asset Credit Agreement, and the other Fixed Asset Documents and any other administrative agent, collateral agent or representative of the holders of Fixed Asset Obligations appointed as a representative for purposes related to the administration of the security documents pursuant to the Fixed Asset Credit Agreement, in such capacity as provided in the Fixed Asset Credit Agreement.

“Fixed Asset Revolving Credit Facility Maturity Date” means the maturity date, commitment termination date, or such similar term with respect to the Revolving Credit Facility in the Fixed Asset Credit Agreement as in effect from time to time.

“Fixed Charge Coverage Ratio” means the ratio as of the last day of any fiscal quarter (or on any date of determination other than the last day of any fiscal quarter, the ratio as of the last day of the most recently ended full fiscal quarter) of (i) an amount equal to Consolidated EBITDA for the four fiscal quarter period then ending minus (y) capital expenditures made in cash by any Person and its Restricted Subsidiaries during such four fiscal quarter period to the extent not financed with the proceeds of Indebtedness minus (z) cash taxes actually paid by any person and its Restricted Subsidiaries during such four fiscal quarter period, to (ii) Consolidated Fixed Charges for such four fiscal quarter period. In the event that any Borrower Party Incurs or redeems or repays any Indebtedness (other than in the case of revolving credit borrowings or revolving advances under any Qualified Receivables Financing or other receivables financing unless the related commitments have been terminated and such Indebtedness has been permanently repaid and has not been replaced) or issues or redeems Preferred Stock or Disqualified Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to, substantially simultaneously with or in connection with, the event for which the calculation of the Fixed Charge Coverage Ratio is made, then the Fixed Charge Coverage Ratio shall be calculated on a Pro Forma Basis.

 

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

“Fixed GAAP Terms” means (a) the definitions of the terms “Capitalized Lease Obligation,” “Consolidated Interest Expense,” “Consolidated Cash Interest Expense,” “Consolidated Net Income,” “Consolidated Total Assets”, “Consolidated First Lien Net Leverage Ratio,” “Consolidated Total Net Leverage Ratio,” “Consolidated Senior Secured Net Leverage Ratio,” “Consolidated Funded Indebtedness,” “Consolidated Funded First Lien Indebtedness,” “Consolidated Funded Senior Secured Indebtedness,” “Consolidated EBITDA,” “Consolidated Fixed Charges,” “Fixed Charge Coverage Ratio,” “Four Quarter Consolidated EBITDA” and “Indebtedness,” (b) all defined terms in this Agreement to the extent used in or relating to any of the foregoing definitions, and all ratios and computations based on any of the foregoing definitions, and (c) any other term or provision of this Agreement that, at the Borrower Representative’s election, may be specified by the Borrower Representative by written notice to the Administrative Agent from time to time; provided that the Borrower Representative may elect to remove any term from constituting a Fixed GAAP Term.

“Foreign Benefit Event” means, with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any applicable Law, or in excess of the amount that would be permitted absent a waiver from a Governmental Authority, (b) the failure to make the required contributions or payments, under any applicable Law, on or before the due date for such contributions or payments, (c) the receipt of a notice by a Governmental Authority relating to the intention to terminate any such Foreign Plan or to appoint a trustee or similar official to administer any such Foreign Plan, or alleging the insolvency of any such Foreign Plan, (d) the incurrence of any liability by the U.S. Borrower or any of its Subsidiaries under applicable Law on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein or (e) the occurrence of any transaction that is prohibited under any applicable Law and that could reasonably be expected to result in the incurrence of any liability by the U.S. Borrower or any of its Subsidiaries, or the imposition on the U.S. Borrower or any of its Subsidiaries of, any fine, excise tax or penalty resulting from any noncompliance with any applicable Law.

“Foreign Plan” means any pension plan, benefit plan, fund (including any superannuation fund) or other similar program established, maintained or contributed to by a Loan Party or any of its Subsidiaries primarily for the benefit of employees employed and residing outside the United States (other than plans, funds or other similar programs that are maintained exclusively by a Governmental Authority), including a Canadian Pension Plan, and which plan is not subject to ERISA or the Code.

“Foreign Subsidiary” means a Subsidiary that is not organized under the laws of the United States, any state thereof or the District of Columbia.

“Four Quarter Consolidated EBITDA” means as of any date of determination with respect to any Test Period, Consolidated EBITDA of the Borrower Parties for such Test Period, in each case on a Pro Forma Basis.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

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“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to a L/C Issuer, such Defaulting Lender’s Pro Rata Share of the outstanding L/C Obligations (other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Non-Defaulting Lenders or Cash Collateralized in accordance with the terms hereof).

“FSHCO” means any entity (i) in which the U.S. Borrower (or any member of the U.S. consolidated group of which the U.S. Borrower is a member) is a United States shareholder (within the meaning of Section 951(b) of the Code and (ii) substantially all of the assets of which consist of Equity Interests and/or indebtedness in one or more Controlled Non-U.S. Subsidiaries and/or one or more other FSHCOs.

“Fund” means any Person (other than a Natural Person) that 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 its business.

“GAAP” means generally accepted accounting principles (which, unless specified otherwise by the Borrower Representative to the Administrative Agent, shall be a private company adoption) in the United States of America as in effect on the Fixed GAAP Date (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Agreement), including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession (but excluding the policies, rules and regulations of the SEC applicable only to public companies); provided that the Borrower Representative may at any time elect by written notice to the Administrative Agent to use IFRS in lieu of GAAP for financial reporting purposes and, upon any such notice, references herein to GAAP shall thereafter be construed to mean (a) for periods beginning on and after the date specified in such notice, IFRS as in effect on the date specified in such notice (for purposes of the Fixed GAAP Terms) and as in effect from time to time (for all other purposes of this Agreement) and (b) for prior periods, GAAP as defined in the first sentence of this definition without giving effect to the proviso thereto. All ratios and computations based on GAAP contained in this Agreement shall be computed in conformity with GAAP.

“Governmental Authority” means any nation or government, any state, province, territory or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including any applicable supranational bodies (such as the European Union or the European Central Bank). Governmental Authority shall not include any Person in its capacity as an Aviation Authority.

“Granting Lender” has the meaning specified in Section 10.07(g).

“Guarantee” means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by the primary obligor in any manner, whether directly or indirectly, and including any Obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation or (iv) entered into for

 

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the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or other monetary obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary or reasonable indemnity obligations in effect on the Closing Date, or entered into in connection with any acquisition or Disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guarantors” means, collectively, Holdings, the U.S. Borrower and, as of the Closing Date, the Subsidiaries of the U.S. Borrower listed on Schedule 1 and each other Subsidiary of the U.S. Borrower that executes and delivers a Guaranty or guaranty supplement pursuant to the Guaranty, Section 6.12 or 6.16, unless any such Subsidiary of the U.S. Borrower has ceased to be a Guarantor pursuant to the terms hereof.

“Guaranty” means, collectively, the Holdings Guaranty, the U.S. Guaranty and the Canadian Guaranty.

“Hazardous Materials” means all explosive or radioactive substances or wastes, contaminants, pollutants and hazardous or toxic substances, materials or wastes, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, toxic mold, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other toxic substances, materials or wastes of any nature regulated pursuant to any Environmental Law.

“Hedge Bank” means any Person that (i) at the time it enters into a Swap Contract, is a Lender or an Agent or an Affiliate of a Lender or an Agent, (ii) within 45 days after the time it enters into a Swap Contract, becomes a Lender or an Agent or an Affiliate of a Lender or an Agent, or (iii) with respect to Swap Contracts in effect as of the Closing Date, is, as of the Closing Date or within 45 days after the Closing Date, a Lender or an Agent or an Affiliate of a Lender or an Agent, in each case, in its capacity as a party to such Swap Contract.

“Holdings” means (i) on or after the Closing Date, the entity specified in the preamble to this Agreement or (ii) after the Closing Date, any other Person (“New Holdings”) that is a direct or indirect parent of Holdings (or the previous New Holdings, as the case may be) (“Previous Holdings”); provided that (a) New Holdings shall (i) directly own 100% of the Equity Interests of the U.S. Borrower and (ii) directly or indirectly own 100% of the Equity Interests of the Canadian Borrower, (b) New Holdings shall expressly assume all the obligations of Previous Holdings under this Agreement and the other Loan Documents pursuant to a supplement hereto or thereto in form and substance reasonably satisfactory to the Administrative Agent and the Borrower Representative, (c) if reasonably requested by the Administrative Agent, a customary opinion of counsel covering matters reasonably requested by the Administrative Agent shall be delivered on behalf of the Borrower Representative to the Administrative Agent, (d)(i) all Capital Stock of the U.S. Borrower and substantially all of the other assets of Previous Holdings shall be contributed or otherwise transferred, directly or indirectly, to New Holdings and pledged to secure the Obligations and (ii) all Capital Stock and all other assets of the Borrowers and the Subsidiary Guarantors that constituted Collateral prior to such substitution shall remain Collateral and

 

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shall remain subject to Liens thereon securing the Obligations or the Canadian Obligations, as applicable, that are valid and enforceable to the same extent as such Liens were valid and enforceable prior to such substitution, (e)(i) no Event of Default shall occur and be continuing at the time of such substitution and such substitution shall not result in any Event of Default and (ii) such substitution shall not result in any material adverse tax consequences in the aggregate, to the Lenders or, individually, to the Administrative Agent, (f) the Administrative Agent shall have received at least five Business Days’ prior written notice (or such shorter period as the Administrative Agent may agree in its reasonable discretion) of the proposed transaction and Previous Holdings, New Holdings and the Borrower Representative shall promptly and in any event at least three Business Days’ prior to the consummation of the transaction provide all information any Lender or any Agent may reasonably request to satisfy its “know your customer”, Beneficial Ownership Certification and other similar requirements necessary for such Person to comply with its internal compliance and regulatory requirements with respect to the proposed successor New Holdings, (g) New Holdings shall be an entity organized or existing under the laws of (i) the United States, any state thereof or the District of Columbia, (ii) Canada, (iii) the Cayman Islands, (iv) Bermuda, (v) Luxembourg, (vi) The Netherlands, (vii) England and Wales or (viii) any other jurisdiction permitted by the Administrative Agent in its reasonable discretion, (h) if reasonably requested by the Administrative Agent, (i) the Loan Parties shall execute and deliver amendments, supplements and other modifications to all Loan Documents, instruments and agreements executed in connection therewith necessary to perfect and protect the liens and security interests in the Collateral of New Holdings, in each case in form and substance substantially consistent with the instruments and agreements previously delivered in respect thereof or reasonably satisfactory to the Administrative Agent; provided that, with the consent of the Administrative Agent (such consent not to be unreasonably withheld, conditioned, delayed or denied), such amendments, supplements, modifications, instruments and/or agreements may be executed and delivered following such substitution and shall not constitute a condition to the effectiveness of New Holdings’ substitution for Previous Holdings and (ii) the Loan Parties shall execute and deliver any documentation reasonably necessary to comply with the local law requirements of the applicable jurisdiction and (i) the U.S. Borrower shall deliver a certificate of a Responsible Officer with respect to the satisfaction of the conditions set forth in clauses (a), (d), (e)(i) and (g) of this definition; provided, further, that if each of the foregoing is satisfied, Previous Holdings shall be automatically released of all its obligations as “Holdings” under the Loan Documents and any reference to “Holdings” in the Loan Documents shall refer to New Holdings.

“Holdings Guaranty” means the Holdings Guaranty made by Holdings in favor of the Administrative Agent on behalf of the Secured Parties, substantially in the form of Exhibit E-1.

“Holdings LLC” has the meaning specified in the Preliminary Statements of this Agreement.

“Honor Date” has the meaning specified in Section 2.03(d)(i).

“IFRS” means the International Financial Reporting Standards as issued by the International Accounting Standards Board.

“Immaterial Subsidiary” means any Subsidiary of the U.S. Borrower that, for any Test Period, does not have (a) assets (when combined with the assets of all other Immaterial Subsidiaries, after eliminating intercompany obligations) in excess of 5.0% of Consolidated Total Assets or (b) Consolidated EBITDA (when combined with the Consolidated EBITDA of all other Immaterial Subsidiaries, after eliminating intercompany obligations) for such Test Period in excess of 5.0% of the Consolidated EBITDA of the U.S. Borrower and the Restricted Subsidiaries for such period; provided that, at all times prior to the first delivery of financial statements pursuant to Section 6.01(a) or (b), this definition shall be applied based on the pro forma consolidated financial statements of the Company and its Subsidiaries delivered to the Administrative Agent prior to the date hereof.

 

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“Increase Effective Date” has the meaning specified in Section 2.14(c).

“Incremental Amount” has the meaning specified in Section 2.14(a).

“Incremental Arranger” has the meaning specified in Section 2.14(a).

“Incur” or “incur” means, with respect to any Indebtedness, Capital Stock or Lien, to issue, assume, guarantee, incur or otherwise become liable for such Indebtedness, Capital Stock or Lien, as applicable; provided that any Indebtedness, Capital Stock or Lien of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. “Incurrence” shall have a meaning correlative to the foregoing.

“Indebtedness” means, with respect to any Person, without duplication:

(a) the principal of any indebtedness of such Person, whether or not contingent, (i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (iii) representing the deferred and unpaid purchase price of any property, (iv) in respect of Capitalized Lease Obligations or (v) representing any Swap Contracts, in each case, if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Swap Contracts) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(b) to the extent not otherwise included, any guarantee by such Person of the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(c) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset on the date such Indebtedness was Incurred or, at the option of such Person, at such date of determination, and (b) the amount of such Indebtedness of such other Person.

The term “Indebtedness” (x) shall not include any lease, concession or license of property (or guarantee thereof) that would be considered an operating lease under GAAP as in effect on the Closing Date in accordance with the Fixed GAAP Terms, (y) shall not include any prepayments of deposits received from clients or customers in the ordinary course of business or consistent with past practices, or obligations under any license, permit or other approval (or guarantees given in respect of such obligations) Incurred prior to the Closing Date or in the ordinary course of business or consistent with past practices and (z) shall not include Indebtedness of Holdings or any Parent Holding Company appearing on the balance sheet of the U.S. Borrower solely by reason of push-down accounting.

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

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

(ii) obligations under or in respect of Receivables Financings;

 

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