SEC Filing | Investor Relations | Williams Scotsman

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

 


 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 7, 2018 (August 3, 2018)

 

WILLSCOT CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-37552

 

82-3430194

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

901 S. Bond Street, #600

Baltimore, Maryland 21231

(Address, including zip code, of principal executive offices)

 

(410) 931-6000

(Registrant’s telephone number, including area code)

 

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

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

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

 

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

 

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

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 



 

Item 1.01              Entry into a Material Definitive Agreement.

 

On August 3, 2018 and August 6, 2018, Mason Finance Sub. Inc., a newly-formed finance subsidiary (the “Escrow Issuer”) of WillScot Corporation (the “Company”), completed private offerings of $200.0 million in aggregate principal amount of its senior unsecured notes due 2023 (the “Unsecured Notes”) and $300.0 million in aggregate principal amount of its 6.875% senior secured notes due 2023 (the “Secured Notes” and together with the Unsecured Notes, the “Notes”), respectively. The Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States in accordance with Regulation S under the Securities Act.

 

The offering proceeds were deposited into escrow accounts, pending the closing of the Company’s previously-announced acquisition of Modular Space Holdings, Inc. (the “ModSpace Acquisition”). The offering proceeds will, contemporaneously with the closing of the ModSpace Acquisition and subject to the satisfaction of certain customary conditions, be released from escrow to fund the ModSpace Acquisition and to pay related costs and expenses. Concurrently therewith, the Escrow Issuer will merge with and into Williams Scotsman International, Inc. (“WSII”), an indirect subsidiary of the Company, with WSII surviving the merger (the “Escrow Merger”) and assuming the obligations under the Notes and the Indentures (as defined below).

 

If the ModSpace Acquisition is not consummated, the Notes will be subject to special mandatory redemption and the escrowed funds will be released to redeem the Notes, pursuant to the terms of the Indentures.

 

Unsecured Notes Indenture

 

On August 3, 2018, the Escrow Issuer entered into an indenture with Deutsche Bank Trust Company Americas, as trustee (the “Unsecured Notes Indenture”), which governs the terms and conditions of the Unsecured Notes.

 

The Unsecured Notes will mature on November 15, 2023.  They will bear interest at a rate of 10.0% per annum if paid in cash (or if paid in kind, 11.5% per annum) for any interest period ending on or before February 15, 2021, and thereafter will be payable solely in cash at an increased rate per annum of 12.5%. Interest will be payable semi-annually on February 15 and August 15 of each year, beginning February 15, 2019. Upon consummation of the Escrow Merger, WSII will assume the Escrow Issuer’s obligations under the Unsecured Notes Indenture.

 

The Unsecured Notes will not be prepayable until February 15, 2019.  From time to time during the period from February 15, 2019 through August 14, 2019, WSII, at its option, may redeem the Unsecured Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Unsecured Notes, plus the Applicable Premium (as defined in the Unsecured Notes Indenture) as of, and accrued and unpaid interest to but not including the redemption date (subject to the right of Holders on the relevant record date to receive interest due on an interest payment date falling on or prior to the redemption date); provided, that if the Notes are being redeemed in part, such redemption will not reduce the aggregate principal amount of the Notes outstanding below $50,000,000 (together with any PIK Interest in respect thereof).  If WSII undergoes a change of control or sells certain of its assets, WSII may be required to offer to repurchase the Unsecured Notes.

 

At any time and from time to time on and after August 15, 2019, WSII, at its option, may redeem the Unsecured Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount set forth below plus accrued and unpaid interest to but not including the applicable redemption date (subject to the right of Holders (as defined therein) on the relevant record date to receive interest due on an interest payment date falling on or prior to the redemption date), if redeemed during the periods referred to below, beginning on August 15, 2019; provided however, that if the Unsecured Notes are being redeemed in part, such redemption will not reduce the aggregate principal amount of the Unsecured Notes outstanding below $50.0 million (together with any PIK Interest in respect thereof).

 

Periods following the Issue Date

 

Redemption
Price

 

August 15, 2019 – February 14, 2020

 

102.000

%

February 15, 2020 – February 14, 2021

 

104.000

%

February 15, 2021 and thereafter

 

106.000

%

 

2



 

From and after the closing of the ModSpace Acquisition, the Unsecured Notes will be unconditionally guaranteed by each of WSII’s direct and indirect domestic subsidiaries and WSII’s parent, Williams Scotsman Holdings Corp. (“Holdings” and collectively, the “Note Guarantors”). The Company is not a guarantor of the Notes.  All Note Guarantors as well as certain of our non-US subsidiaries are guarantors or borrowers under WSII’s asset-backed revolving credit facility, as amended from time to time (including in connection with the ModSpace Acquisition) (the “ABL Facility”). To the extent the lenders under the ABL Facility release any Note Guarantor’s guarantee in respect of the ABL Facility (other than in connection with a repayment or satisfaction of obligations in full), such Note Guarantor will also be released from its guarantee obligations in respect of the Unsecured Notes.  The Note Guarantors’ guarantees of the Unsecured Notes are senior, unsecured obligations (except that the guarantee of the Unsecured Notes provided by WillScot Equipment II, LLC, a Delaware limited liability company (“WS Equipment II”) which holds certain of WSII’s uncertificated assets in the United States, will be subordinated to its obligations under the ABL Facility).

 

Secured Notes Indenture

 

On August 6, 2018, the Escrow Issuer entered into an indenture with Deutsche Bank Trust Company Americas, as trustee (the “Secured Notes Indenture” and together with the Unsecured Notes Indenture, the “Indentures”), which governs the terms of the Secured Notes.

 

The Secured Notes will mature on August 15, 2023. They will bear interest at a rate of 6.875% per annum. Interest will be payable semi-annually on February 15 and August 15 of each year, beginning February 15, 2019. Upon consummation of the Escrow Merger, WSII will assume the Escrow Issuer’s obligations under the Secured Notes Indenture.

 

At any time and from time to time on and after August 15, 2020, WSII, at its option, may redeem the Secured Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount set forth below plus accrued and unpaid interest to but not including the applicable redemption date (subject to the right of Holders on the relevant record date to receive interest due on an interest payment date falling on or prior to the redemption date), if redeemed during the 12 month period beginning on August 15 of each of the years set forth below.

 

Year

 

Redemption
Price

 

2020

 

103.438

%

2021

 

101.719

%

2022 and thereafter

 

100.000

%

 

WSII may redeem the Secured Notes at any time before August 15, 2020 at a redemption price equal to 100% of the principal amount thereof, plus a customary make whole premium for the Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date. At any time prior to August 15, 2020, WSII may redeem up to 40% of the aggregate principal amount of the Notes at a price equal to 106.875% of the principal amount of the Secured Notes being redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date with the net proceeds of certain equity offerings. WSII may also redeem up to 10% of the aggregate principal amount of the Notes at any time prior to the second anniversary of the closing date of this offering at a redemption price equal to 103% of the principal amount of the Notes being redeemed during each twelve-month period commencing with the issue date, plus accrued and unpaid interest, if any, to but not including the redemption date. If WSII undergoes a change of control or sells certain of its assets, WSII may be required to offer to repurchase the Notes.

 

From and after the closing of the ModSpace Acquisition, the Secured Notes will be unconditionally guaranteed by the Note Guarantors. The Company is not a guarantor of the Notes. The Note Guarantors as well as certain of our non-US subsidiaries are guarantors or borrowers under the ABL Facility.  To the extent lenders under the ABL Facility release any Note Guarantor’s guarantee of the obligations in respect of the ABL Facility (other than in connection with a repayment or satisfaction of obligations in full), such Note Guarantor will also be released from its guarantee obligations in respect of the Secured Notes.  These guarantees are secured by a second priority security interest in substantially all of the assets of WSII and the Note Guarantors (subject to customary exclusions).  The guarantees of the Secured Notes by WS Equipment II, which holds certain of WSII’s uncertificated assets in the United States, will be subordinated to its obligations under the ABL Facility.

 

3



 

Item 2.02                                           Results of Operations and Financial Condition.

 

On August 7, 2018, the Company issued a press release announcing financial results for the second quarter ended June 30, 2018, a copy of which is attached as Exhibit 99.1.

 

The information in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act, except as expressly set forth by specific reference in such filing.

 

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

 

The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

 

Item 9.01              Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit
Number

 

Description

 

 

 

1.1

 

Indenture, dated as of August 3, 2018, by and among Mason Finance Sub, Inc., the guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee.

 

 

 

1.2

 

Indenture, dated as of August 6, 2018, by and among Mason Finance Sub, Inc., the guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee.

 

 

 

99.1

 

Press release, dated August 7, 2018, announcing financial results of the second quarter ended June 30, 2018.

 

4



 

SIGNATURE

 

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

 

 

WillScot Corporation

 

 

 

By:

/s/ Bradley Bacon

Dated: August 7, 2018

 

Name: Bradley Bacon

 

 

Title: Vice President, General Counsel
          & Corporate Secretary

 

5


Exhibit 1.1

 

EXECUTION VERSION

 

 

 

MASON FINANCE SUB, INC.

(to be merged with and into WILLIAMS SCOTSMAN INTERNATIONAL, INC.),

 

as Issuer

 

and

 

THE GUARANTORS PARTY HERETO

 


 

SENIOR UNSECURED NOTES DUE 2023

 


 

INDENTURE

 

DATED AS OF AUGUST 3, 2018

 


 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

as Trustee

 

 

 



 

TABLE OF CONTENTS

 

Clause

 

Page

 

 

 

Article I DEFINITIONS AND INCORPORATION BY REFERENCE

 

1

 

 

 

SECTION 1.1 Definitions

 

1

SECTION 1.2 Other Definitions

 

46

SECTION 1.3 Trust Indenture Act Term

 

47

SECTION 1.4 Rules of Construction

 

47

 

 

 

Article II THE NOTES

 

48

 

 

 

SECTION 2.1 Form and Dating

 

48

SECTION 2.2 Execution and Authentication

 

50

SECTION 2.3 Registrar; Paying Agent

 

50

SECTION 2.4 Paying Agent to Hold Money in Trust

 

51

SECTION 2.5 Holder Lists

 

51

SECTION 2.6 Book-Entry Provisions for Global Securities

 

52

SECTION 2.7 Replacement Notes

 

54

SECTION 2.8 Outstanding Notes

 

54

SECTION 2.9 Treasury Notes

 

54

SECTION 2.10 Temporary Notes

 

55

SECTION 2.11 Cancellation

 

55

SECTION 2.12 [Reserved]

 

55

SECTION 2.13 CUSIP Number

 

55

SECTION 2.14 Special Transfer Provisions

 

55

SECTION 2.15 Issuance of Additional Notes

 

58

 

 

 

Article III REDEMPTION AND PREPAYMENT

 

59

 

 

 

SECTION 3.1 Notices to Trustee

 

59

SECTION 3.2 Selection of Notes to Be Redeemed

 

59

SECTION 3.3 Notice of Redemption

 

59

SECTION 3.4 Effect of Notice of Redemption

 

60

SECTION 3.5 Deposit of Redemption Price

 

60

SECTION 3.6 Notes Redeemed in Part

 

61

SECTION 3.7 Optional Redemption

 

61

SECTION 3.8 Offer to Purchase

 

62

SECTION 3.9 [Reserved]

 

63

SECTION 3.10 Mandatory Redemptions

 

63

 

 

 

Article IV COVENANTS

 

64

 

 

 

SECTION 4.1 Payment of Notes

 

64

SECTION 4.2 Maintenance of Office or Agency

 

64

SECTION 4.3 Reports

 

65

SECTION 4.4 Compliance Certificate

 

65

 

i



 

SECTION 4.5 Taxes

 

66

SECTION 4.6 Stay, Extension and Usury Laws

 

66

SECTION 4.7 Limitation on Restricted Payments

 

66

SECTION 4.8 Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries

 

70

SECTION 4.9 Limitation on Incurrence of Debt

 

73

SECTION 4.10 Limitation on Asset Sales

 

75

SECTION 4.11 Limitation on Transactions with Affiliates

 

77

SECTION 4.12 Limitation on Liens

 

80

SECTION 4.13 Limitation on Sale and Leaseback Transactions

 

81

SECTION 4.14 Offer to Purchase upon a Change of Control

 

81

SECTION 4.15 Maintenance of Properties, Corporate Existence and Insurance

 

82

SECTION 4.16 Limited Condition Transactions

 

83

SECTION 4.17 Additional Note Guarantees

 

84

SECTION 4.18 Limitation on Creation of Unrestricted Subsidiaries

 

84

SECTION 4.19 [Reserved]

 

85

SECTION 4.20 Suspension of Covenants

 

85

SECTION 4.21 Mandatory Merger and Assumption; Activities of Escrow Issuer

 

86

SECTION 4.22 Covenant Compliance Prior to the Escrow Release Date

 

87

 

 

 

Article V SUCCESSORS

 

87

 

 

 

SECTION 5.1 Consolidation, Amalgamation, Merger, Conveyance, Transfer or Lease

 

87

SECTION 5.2 Successor Person Substituted

 

89

 

 

 

Article VI DEFAULTS AND REMEDIES

 

89

 

 

 

SECTION 6.1 Events of Default

 

89

SECTION 6.2 Acceleration

 

91

SECTION 6.3 Other Remedies

 

92

SECTION 6.4 Waiver of Past Defaults

 

92

SECTION 6.5 Control by Majority

 

92

SECTION 6.6 Limitation on Suits

 

92

SECTION 6.7 Rights of Holders of Notes to Receive Payment

 

93

SECTION 6.8 Collection Suit by Trustee

 

93

SECTION 6.9 Trustee May File Proofs of Claim

 

93

SECTION 6.10 Priorities

 

94

SECTION 6.11 Undertaking for Costs

 

94

 

 

 

Article VII TRUSTEE

 

95

 

 

 

SECTION 7.1 Duties of Trustee

 

95

SECTION 7.2 Rights of Trustee

 

96

SECTION 7.3 Individual Rights of Trustee

 

97

SECTION 7.4 Trustee’s Disclaimer

 

98

SECTION 7.5 Notice of Defaults

 

98

 



 

SECTION 7.6 [Reserved]

 

98

SECTION 7.7 Compensation and Indemnity

 

98

SECTION 7.8 Replacement of Trustee

 

99

SECTION 7.9 Successor Trustee by Merger, Etc.

 

100

SECTION 7.10 Eligibility; Disqualification

 

101

SECTION 7.11 Preferential Collection of Claims Against the Issuer

 

101

SECTION 7.12 Trustee’s Application for Instructions from the Issuer

 

101

SECTION 7.13 Limitation of Liability

 

101

SECTION 7.14 Holders’ Authorization to Trustee

 

102

SECTION 7.15 [Reserved]

 

102

 

 

 

Article VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

102

 

 

 

SECTION 8.1 Option to Effect Legal Defeasance or Covenant Defeasance

 

102

SECTION 8.2 Legal Defeasance

 

102

SECTION 8.3 Covenant Defeasance

 

103

SECTION 8.4 Conditions to Legal Defeasance or Covenant Defeasance

 

103

SECTION 8.5 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions

 

104

SECTION 8.6 Repayment to Issuer

 

105

SECTION 8.7 Reinstatement

 

105

SECTION 8.8 Discharge

 

106

 

 

 

Article IX AMENDMENT, SUPPLEMENT AND WAIVER

 

107

 

 

 

SECTION 9.1 Without Consent of Holders

 

107

SECTION 9.2 With Consent of Holders

 

108

SECTION 9.3 Revocation and Effect of Consents

 

109

SECTION 9.4 Notation on or Exchange of Notes

 

110

SECTION 9.5 Trustee to Sign Amendments, Etc.

 

110

 

 

 

Article X [INTENTIONALLY OMITTED]

 

110

 

 

 

Article XI NOTE GUARANTEES

 

110

 

 

 

SECTION 11.1 Note Guarantees

 

110

SECTION 11.2 [Reserved]

 

112

SECTION 11.3 Severability

 

112

SECTION 11.4 Limitation of Guarantors’ Liability

 

112

SECTION 11.5 Guarantors May Consolidate, Etc., on Certain Terms

 

112

SECTION 11.6 Release of a Guarantor

 

113

SECTION 11.7 Benefits Acknowledged

 

114

SECTION 11.8 Future Guarantors

 

114

 

 

 

Article XII MISCELLANEOUS

 

115

 

 

 

SECTION 12.1 [Reserved]

 

115

SECTION 12.2 Notices

 

115

 



 

SECTION 12.3 [Reserved]

 

117

SECTION 12.4 Certificate and Opinion as to Conditions Precedent

 

117

SECTION 12.5 Statements Required in Certificate or Opinion

 

117

SECTION 12.6 Rules by Trustee and Agents

 

118

SECTION 12.7 No Personal Liability of Directors, Officers, Employees and Stockholders

 

118

SECTION 12.8 Governing Law

 

118

SECTION 12.9 Consent to Jurisdiction; Waiver of Trial by Jury; Service of Process

 

118

SECTION 12.10 No Adverse Interpretation of Other Agreements

 

118

SECTION 12.11 Successors

 

119

SECTION 12.12 Severability

 

119

SECTION 12.13 Counterpart Originals

 

119

SECTION 12.14 Table of Contents, Headings, Etc.

 

119

SECTION 12.15 Acts of Holders

 

119

SECTION 12.16 [Reserved]

 

120

SECTION 12.17 [Reserved]

 

120

SECTION 12.18 USA Patriot Act

 

120

SECTION 12.19 Force Majeure

 

120

SECTION 12.20 Calculations

 

121

 



 

EXHIBITS

 

Exhibit A                                             FORM OF SENIOR UNSECURED NOTE DUE 2023

 

Exhibit B                                             FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO RULE 144A

 

Exhibit C                                             FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S

 

Exhibit D                                             FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS

 

Exhibit E                                              FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS

 

Exhibit F                                               FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED IN CONNECTION WITH THE ESCROW MERGER

 

SCHEDULE

 

Schedule 1                                     EXISTING INVESTMENTS

 



 

This Indenture, dated as of August 3, 2018 is by and among Mason Finance Sub, Inc., a Delaware corporation, as issuer (the “Escrow Issuer”), the Guarantors (as defined herein), Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee (in such capacity and not in its individual capacity, and together with its permitted successors and assigns in such capacity, the “Trustee”).

 

On the date of the consummation of the ModSpace Acquisition (as defined below), (i) the Escrow Issuer will merge with and into Williams Scotsman International, Inc., a Delaware corporation (“WS International”), with WS International as the surviving company of such merger (the “Escrow Merger”) and (ii) WS International will enter into a supplemental indenture and assume the obligations of the Escrow Issuer under this Indenture and the Notes.  In this Indenture, unless context otherwise requires, (i) references to the “Issuer” mean, prior to the Escrow Merger, the Escrow Issuer, and, from and after the Escrow Merger, WS International.

 

Each party hereto agrees as follows for the benefit of the other parties hereto and for the equal and ratable benefit of the Holders of (i) the Issuer’s $200,000,000 Senior Unsecured Notes due 2023 issued on the date hereof (the “Initial Notes”), (ii) any Additional Notes (as defined herein), (iii) PIK Notes (as defined herein) that may be issued from time to time (together with the Initial Notes, any Additional Notes and, in each case, any Notes issued in replacement or substitution therefor in accordance with the provisions of this Indenture, the “Notes”).

 

Article I

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.1 Definitions.

 

2017 Senior Secured Notes” means the $300,000,000 aggregate principal amount of 7.875% Senior Secured Notes due 2022 issued by WS International.

 

2017 Senior Secured Notes Indenture” means the indenture governing the 2017 Senior Secured Notes.

 

2018 Senior Secured Notes” means the $300,000,000 aggregate principal amount of 6.875% Senior Secured Notes due 2023 to be issued by the Issuer in connection with the ModSpace Acquisition.

 

2018 Senior Secured Notes Indenture” means the indenture governing the 2018 Senior Secured Notes.

 

Acquired Debt” means Debt of a Person existing at the time such Person becomes a Restricted Subsidiary or assumed by the Issuer or a Restricted Subsidiary in connection with the acquisition of assets from such Person; provided, however, that Debt of such Person which is redeemed, defeased, retired, or otherwise repaid at the time of or immediately upon consummation of the transactions by which such Person becomes a Restricted Subsidiary or such asset acquisition shall not be Acquired Debt.

 



 

Additional Notes” means additional Notes (other than the Initial Notes and any PIK Notes issued as a result of PIK Interest) issued under this Indenture in accordance with Sections 2.2 and 4.9 hereof, of the same series as the Initial Notes.

 

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

 

Agent” means any Registrar, co-register Paying Agent or additional paying agent.

 

Applicable Premium” means, with respect to any Note on any applicable redemption date, as calculated by the Issuer, the greater of:

 

(1)         1.00% of the then outstanding principal amount of the Note; and

 

(2)         the excess of:

 

(a)         the present value at such redemption date of (i) the redemption price of the Note at August 15, 2019 (such redemption price being set forth in Section 3.7(b), plus (ii) all required interest payments due on the Note through August 15, 2019 (excluding accrued but unpaid interest to such redemption date), in each case, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

 

(b)         the then outstanding principal amount of the Note.

 

Asset Acquisition” means:

 

(a)         an Investment by the Issuer or any of its Restricted Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary (including the redesignation of an Unrestricted Subsidiary), or shall be merged with or into the Issuer or any of its Restricted Subsidiaries; or

 

(b)         the acquisition by the Issuer or any of its Restricted Subsidiaries of the assets of any Person (other than the Issuer or any of its Restricted Subsidiaries) which constitute all or substantially all of the assets of such Person, any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business.

 

Asset Sale” means:

 

(a)         the sale, lease, transfer, conveyance or other disposition (each referred to for the purposes of this definition as a “disposition”) of any assets of the Issuer or any of its Restricted Subsidiaries outside the ordinary course in any single transaction or series of related transactions; provided that the disposition of all or substantially

 

2



 

all of the consolidated assets of the Issuer and its Restricted Subsidiaries taken as a whole, will be governed by Section 4.14 and/or Section 5.1 and not by Section 4.10; and

 

(b)         the issue or sale by the Issuer or any of its Restricted Subsidiaries of Equity Interests in any of the Issuer’s Restricted Subsidiaries (other than Equity Interests in the Issuer or directors’ qualifying shares or shares or interests required to be held by foreign nationals pursuant to local law).

 

provided, however, that the term “Asset Sale” shall exclude:

 

(a)         any disposition of Equity Interests, property or assets, the gross proceeds of which (exclusive of indemnities) do not exceed in any one or related series of transactions $20.0 million;

 

(b)         dispositions of (i) cash, (ii) Cash Equivalents or (iii) other Investments in existence on the Issue Date that are properly characterized under GAAP as cash and cash equivalents, short term investments, restricted cash or long term investments;

 

(c)          the disposition, abandonment or lease of equipment, products, services, and inventory in the ordinary course of business and any disposition or abandonment of damaged, worn-out, used, surplus, obsolete or permanently retired assets or assets that, in the good faith judgment of the Issuer, are no longer used or useful in its business;

 

(d)         the sale and leaseback of any assets within 90 days of the acquisition thereof;

 

(e)          a Restricted Payment that is permitted by Section 4.7 or a Permitted Investment;

 

(f)           any trade-in of equipment in exchange for other equipment in the ordinary course of business;

 

(g)          the Incurrence of a Lien otherwise than in contravention of Section 4.12 (and the exercise of any power of sale or other remedy thereunder);

 

(h)         leases, assignments, licenses or subleases in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and are otherwise not prohibited under this Indenture;

 

(i)             dispositions (i) by a Restricted Subsidiary to the Issuer or (ii) by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;

 

(j)            issuances of Equity Interests by a Restricted Subsidiary to the Issuer or to a Restricted Subsidiary;

 

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(k)         dispositions of accounts receivable including in connection with the collection or compromise thereof;

 

(l)             any surrender or waiver of contract rights or the settlement, release, or surrender of contract, tort, intangible claims or other claims;

 

(m)     licensing of intellectual property;

 

(n)         dispositions of accounts receivable, or a fractional undivided interest therein, by a Receivables Subsidiary in a Qualified Receivables Transaction;

 

(o)         dispositions of accounts receivable, chattel paper and assets related thereto, including collateral securing such accounts receivable, contracts and contract rights, purchase orders, security interests, financing statements and other documentation, and all guarantees, warranties or other documentation or other obligations in respect of such accounts receivable, and other assets which are customarily transferred in connection with asset securitization transactions involving receivables similar to such accounts receivable (and any collections or proceeds thereof), in each case, to a Receivables Subsidiary pursuant to a Qualified Receivables Transaction;

 

(p)         the unwinding of any Hedging Obligations;

 

(q)         any sale of Equity Interests in, or Debt or other securities of, an Unrestricted Subsidiary;

 

(r)            the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock that is permitted by Section 4.9;

 

(s)           dispositions to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture agreements and similar binding agreements;

 

(t)            dispositions to the extent made pursuant to casualty or condemnation events or business interruption; or

 

(u)         dispositions made to comply with any order of any agency of the U.S. federal government or any state authority or other regulatory body or any applicable law.

 

For purposes of this definition, any series of related transactions that, if effected as a single transaction, would constitute an Asset Sale, shall be deemed to be a single Asset Sale effected when the last such transaction which is part thereof is effected.

 

Asset Sale Offer” means an Offer to Purchase required to be made by the Issuer pursuant to Section 4.10 to all Holders.

 

Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction,

 

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determined in accordance with GAAP) of the obligations of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been or may, at the option of the lessor, be extended); provided, however, that if such Sale and Leaseback Transaction results in a Capital Lease Obligation, the amount of Debt represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

 

Bank Product Obligations means, all obligations and liabilities (whether direct or indirect, absolute or contingent, due or to become due or now existing or hereafter incurred) of the Issuer, any Guarantor or any of their respective Subsidiaries, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise, which may arise under, out of, or in connection with any treasury, investment, depository, clearing house, wire transfer, cash management or automated clearing house transfers of funds services or any related services, to any Person.

 

Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

 

Bankruptcy Law” means Title 11 of the Bankruptcy Code, as amended, or any other United States federal or state bankruptcy, insolvency or similar law, fraudulent transfer or conveyance statute and any related case law.

 

Board of Directors” means (i) with respect to the Issuer or any of its Restricted Subsidiaries, its board of directors or any duly authorized committee thereof; (ii) with respect to a corporation, the board of directors of such corporation or any duly authorized committee thereof; and (iii) with respect to any other entity, the board of directors or similar body of the general partner or managers of such entity or any duly authorized committee thereof.

 

Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Issuer or any Restricted Subsidiary to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

 

Borrowing Base” means, at any time, an amount equal to the sum (expressed in U.S. Dollars) of, without duplication, 95% of the book value of the accounts receivable of the Issuer and its Restricted Subsidiaries and (2) 85% of the book value of the inventory and rental equipment of the Issuer and its Restricted Subsidiaries, in each case calculated on a Pro Forma Basis and in accordance with GAAP.

 

Business Day” means any day other than a Legal Holiday.

 

Capital Lease Obligation” means, as to any Person, the obligation of such Person under a lease that is required to be classified and accounted for as a capital lease or finance lease obligation under GAAP as in effect on the Issue Date; and the amount of such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated or prepaid by the lessee without payment of a penalty. For purposes of Section 4.12, a Capital Lease Obligation shall be deemed secured by a Lien on the property being leased.

 

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Capital Stock” means:

 

(1)         in the case of a corporation, corporate stock or shares;

 

(2)         in the case of an association or business entity other than a corporation, any and all shares, interests, participations, rights or other equivalents (however designated) similar to corporate stock;

 

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

 

(4)         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.

 

Cash Equivalents” means:

 

(a)         U.S. Dollars, Canadian Dollars, Euros or such other foreign currencies held by the Issuer or its Restricted Subsidiaries from time to time in the ordinary course of business;

 

(b)         securities with maturities of two years or less from the date of acquisition issued or unconditionally guaranteed by (i) the United States government, or by any state of the United States of America, or, in each case, by any political subdivision or taxing authority thereof or (ii) the Canadian government or any province, territory, political subdivision, agency or instrumentality thereof;

 

(c)          domestic and LIBOR certificates of deposit, demand deposits and Eurodollar time deposits with maturities of two years or less from the date of acquisition, bankers’ acceptances with maturities not exceeding two years and overnight bank deposits, in each case, issued by lender under the ABL Credit Facility or any other bank having combined capital and surplus in excess of $500.0 million (in the case of domestic banks);

 

(d)         repurchase obligations for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above or securities dealers of recognized national standing;

 

(e)          commercial paper, marketable short-term money market and similar securities at the time of acquisition, having one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized rating service);

 

(f)           marketable short-term money market and similar funds having (i) assets in excess of $250.0 million or (ii) a rating of at least A-1 or P-1 from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such

 

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obligations, an equivalent rating from another nationally recognized rating service);

 

(g)          Debt or preferred stock issued by Persons with a rating of A- or higher from S&P or A3 or higher from Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another rating agency) with maturities of 12 months or less from the date of acquisition;

 

(h)         bills of exchange issued in the United States or Canada eligible for rediscount at the relevant central bank and accepted by a bank (or any dematerialized equivalent);

 

(i)             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 or Aaa3 (or the equivalent thereof) or better by Moody’s;

 

(j)            investment funds investing at least 95% of their assets in securities which are one or more of the types of securities described in clauses (b) through (i) above; and

 

(k)         in the case of Investments by any Foreign Subsidiary or Investments made in a country outside Canada and the United States, Cash Equivalents shall also include (i) direct obligations of the sovereign nation (or any agency thereof) in which such Foreign Subsidiary is organized and is conducting business or where such Investment is made, or in obligations fully and unconditionally guaranteed by such sovereign nation (or any agency thereof), in each case maturing within a two years after such date and having, at the time of the acquisition thereof, a rating equivalent to one of the two highest ratings from either S&P or Moody’s, (ii) investments of the type and maturity described in clauses (b) through (j) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies, (iii) shares of money market mutual or similar funds which invest exclusively in assets otherwise satisfying the requirements of this definition (including this clause (iii)) and (iv) other short-term investments utilized by such Foreign Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (b) through (j).

 

Cash Management Agreements” means any agreement providing for treasury, depository, purchasing card or cash management services, including in connection with any automated clearing house transfer of funds or any similar transaction.

 

Certificated Notes” means Notes that are in the form of Exhibit A attached hereto, including the applicable legend or legends set forth in Exhibit A.

 

Change of Control” means the occurrence of any of the following events:

 

(a)         any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), becoming the ultimate “beneficial owner” (as such term is

 

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used in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (a), such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the Voting Stock in WS International unless the Permitted Holders otherwise have the right (pursuant to contract, proxy or otherwise), directly or indirectly, to designate, nominate or appoint a majority of the directors of WS International;

 

(b)         WS International or any Restricted Subsidiary sells, conveys, transfers or leases (either in one transaction or a series of related transactions) all or substantially all of WS International’s and its Restricted Subsidiaries’ assets (determined on a consolidated basis) to any Person other than WS International, or a Restricted Subsidiary of WS International or any Permitted Holder; or

 

(c)          Holdings ceases to own 100% of the outstanding Capital Stock of WS International.

 

Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Issuer becomes a direct or indirect wholly-owned Subsidiary of a company and (2) (a) the direct or indirect holders of the Voting Stock of the ultimate parent holding company immediately following that transaction are substantially the same as the holders of the Issuer’s Voting Stock immediately prior to that transaction or (b) no “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of the total voting power of the Voting Stock of such ultimate parent holding company (provided that if any “group” (other than a Permitted Holder) includes one or more Permitted Holders, the issued and outstanding Voting Stock of the Issuer owned, directly or indirectly, by any Permitted Holders that are part of such group shall not be treated as being beneficially owned by such group or any other member of such group for purposes of determining whether a Change of Control has occurred).

 

Code” means the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated thereunder.

 

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.

 

Common Stock” means with respect to any Person, any and all shares, interest or other participations in, and other equivalents (however designated and whether voting or nonvoting) of such Person’s common stock, whether or not outstanding on the Issue Date, and includes all series and classes of such common stock.

 

Consolidated EBITDA” means, with respect to the Issuer and its Restricted Subsidiaries for any period:

 

(i)                       the sum, without duplication, of the amounts for such period, taken as a single accounting period, of:

 

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(a)         Consolidated Net Income;

 

(b)         Consolidated Income Tax Expense;

 

(c)          Consolidated Interest Expense for such period (but including items excluded from the definition of “Consolidated Interest Expense” pursuant to clauses (1)(i) through (1)(ix) thereof), to the extent the same were deducted (and not added back) in calculating such Consolidated Net Income

 

(d)         depreciation and amortization of the Issuer and the Restricted Subsidiaries for such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income;

 

(e)          any expenses or charges (other than depreciation or amortization expenses) related to any equity offering (including by any direct or indirect parent of the Issuer), acquisition, disposition, recapitalization or the Incurrence of Debt permitted to be Incurred by this Indenture (including a refinancing of any Credit Facilities) (whether or not successful), and any amendment or modification to the terms of any such transaction including such fees, expenses or charges (i) related to the Transactions or (ii) any amendment or other modification of the Credit Facilities or this Indenture, and, in each case, deducted (and not added back) in computing Consolidated Net Income;

 

(f)           the amount of any restructuring charges or reserves, business optimization expenses or non-recurring integration costs deducted (and not added back) in such period in computing Consolidated Net Income, including any one-time costs Incurred in connection with acquisitions after the Issue Date and costs and charges related to the closure and/or consolidation of facilities, severance, relocation costs, integration and facilities opening costs, transition costs and other restructuring costs;

 

(g)          any other non-cash charges, including any write offs or write downs (other than write offs or write downs on accounts or chattel paper of the Issuer), reducing Consolidated Net Income for such period (and not added back) (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA in such future period to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period);

 

(h)         the amount of any non-controlling interest expense consisting of Subsidiary income attributable to minority Equity Interests of third parties in any non-wholly-owned Subsidiary of the Issuer deducted (and not added back) in such period in the calculation of Consolidated Net Income;

 

(i)             the amount of loss or discount on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Transaction

 

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deducted (and not added back) in such period in the calculation of Consolidated Net Income;

 

(j)            any costs or expenses Incurred by the Issuer or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the applicable Person or Net Cash Proceeds of an issuance of Capital Stock or other Equity Interests of the applicable Person, in each case to the extent deducted (and not added back) in such period in the calculation of Consolidated Net Income;

 

(k)         the amount of expenses relating to payments made to option holders of Holdings or any other parent (direct or indirect) of the Issuer in connection with, or as a result of, any distribution being made to shareholders of such Person or its parent, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, in each case to the extent permitted under this Indenture and to the extent deducted (and not added back) in such period in the calculation of Consolidated Net Income;

 

(l)             costs associated with, or in anticipation of, or preparation for, compliance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith or other enhanced accounting functions and Public Company Costs, in each case to the extent deducted (and not added back) in such period in the calculation of Consolidated Net Income;

 

(m)     costs of surety bonds Incurred in such period in connection with financing activities to the extent deducted (and not added back) in such period in the calculation of Consolidated Net Income; and

 

(n)         payments paid or accrued during such period in respect of purchase price holdbacks or earn-outs of the Issuer and its Restricted Subsidiaries (other than Debt), in each case to the extent deducted (and not added back) in such period in the calculation of Consolidated Net Income;

 

(ii)                    less (without duplication) non-cash gains increasing Consolidated Net Income of the Issuer and the Restricted Subsidiaries for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced Consolidated EBITDA in any prior period; provided that, to the extent non-cash gains are deducted pursuant to this clause (ii) for any previous period and not otherwise added back to Consolidated EBITDA, Consolidated EBITDA shall be increased by the amount of any cash receipts (or any netting arrangements resulting in reduced cash expenses) in respect of such non-cash gains received in subsequent periods to the extent not already included therein.

 

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Consolidated Income Tax Expense” means, with respect to the Issuer and its Restricted Subsidiaries for any period, provision for taxes based on income or profits or capital, including, without limitation, foreign, U.S. federal, state, franchise, excise and similar taxes and foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) of the Issuer and the Restricted Subsidiaries paid or accrued during such period deducted (and not added back) in computing Consolidated Net Income and any payments to any direct or indirect parent of the Issuer in respect of any such taxes.

 

Consolidated Interest Expense” means, with respect to the Issuer and its Restricted Subsidiaries for any period the sum, without duplication, of:

 

(i)   consolidated interest expense of the Issuer and the Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Debt at less than par, other than with respect to Debt issued in connection with the Transactions, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capital Lease Obligations, and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Debt, and excluding (i) penalties and interest relating to taxes, (ii) any “additional interest” relating to customary registration rights with respect to any securities, (iii) non-cash interest expense attributable to movement in mark-to-market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder under GAAP), (iv) interest expense attributable to a direct or indirect parent thereof resulting from push-down accounting, (v) accretion or accrual of discounted liabilities not constituting Debt, (vi) any expense resulting from the discounting of Debt in connection with the application of recapitalization or purchase accounting, (vii) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and, with respect to Debt issued in connection with the Transactions, original issue discount, (viii) any expensing of bridge, commitment and other financing fees and (ix) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Transaction); plus

 

(ii)  consolidated capitalized interest of the Issuer and the Restricted Subsidiaries for such period, whether paid or accrued;

 

(iii) less interest income of the Issuer and the Restricted Subsidiaries for such period.

 

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

 

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Consolidated Net Income” means, with respect to the Issuer and its Restricted Subsidiaries for any period, the aggregate of the consolidated net income (or loss) attributable to the Issuer and its Restricted Subsidiaries for such period, as determined in accordance with GAAP and before any deduction in respect of any dividends on preferred stock, adjusted by:

 

(A)       excluding, to the extent included in calculating such net income, without duplication

 

(i)                       any after-tax effect of (a) extraordinary gains, losses or charges (including all fees and expenses relating thereto) or expenses and (b) non-recurring or unusual gains, losses or charges (including all fees and expenses relating thereto) or expenses (including the Transaction Expenses);

 

(ii)                    the cumulative effect of a change in accounting principles during such period and changes as a result of the adoption or modification of accounting policies;

 

(iii)                 any after-tax effect of income (loss) from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets;

 

(iv)                any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions or abandonments or the sale or other disposition of any Capital Stock of any Person other than in the ordinary course of business, as determined in good faith by the Issuer;

 

(v)                   the net income for such period of any Non-Recourse Subsidiary, any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting; provided that Consolidated Net Income of the Issuer shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash or Cash Equivalents) by such Non-Recourse Subsidiary or Person that is not a Subsidiary or Unrestricted Subsidiary, as the case may be, to the Issuer or any Restricted Subsidiary thereof in respect of such period;

 

(vi)                effects of adjustments (including the effects of such adjustments pushed down to the Issuer and its Restricted Subsidiaries) in the inventory, property and equipment, software and other intangible assets and in process research and development, deferred revenue and debt line items in the Issuer’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes;

 

(vii)             any after-tax effect of income (loss) from the early extinguishment of Debt or Hedging Obligations or other derivative instruments (including deferred financing costs written off and premiums paid);

 

(viii)          any impairment charge, asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived

 

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assets, Investments in debt and equity securities or as a result of a change in law or regulation, the amortization of intangibles, and the effects of adjustments to accruals and reserves during a prior period relating to any change in the methodology of calculating reserves for returns, rebates and other chargebacks (including government program rebates), in each case, pursuant to GAAP;

 

(ix)                any (a) non-cash compensation charge or expense related to the grants of stock appreciation or similar rights, phantom equity, stock options, restricted stock or other rights and (b) income (loss) attributable to deferred compensation plans or trusts;

 

(x)                   accruals and reserves that are established within 12 months after the Escrow Release Date that are so required to be established as a result of the Transactions (or within 12 months after the closing of any acquisition that are so required to be established as a result of such acquisition) in accordance with GAAP or charges, accruals, expenses and reserves as a result of adoption or modification of accounting policies in accordance with GAAP;

 

(xi)                any net gain or loss resulting in such period from currency transaction or translation gains or losses related to currency remeasurements and (b) any income (or loss) related to currency gains or losses related to Debt, intercompany balance sheet items and Hedging Obligations; and

 

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

 

(B)       including, to the extent not already accounted for, and notwithstanding anything to the contrary in the foregoing, (i) the amount of proceeds received during such period from business interruption insurance in respect of insured claims for such period, (ii) the amount of proceeds as to which the Issuer has determined there is reasonable evidence it will be reimbursed by the insurer in respect of such period from business interruption insurance (with a deduction for any amounts included to the extent not so reimbursed within 365 days) and (iii) reimbursements received of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any Investment or any sale, conveyance, transfer or other disposition of assets, in each case to the extent permitted under this Indenture.

 

Consolidated Secured Net Debt Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Debt of the Issuer and its Restricted Subsidiaries that is secured by a Lien on the assets of the Issuer or any of its Restricted Subsidiaries on the date of determination less the aggregate amount of cash and Cash Equivalents of the Issuer and its Restricted Subsidiaries on a consolidated basis as of such date, to (b) Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the most recent Four-Quarter Period, calculated on a Pro Forma Basis.

 

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Consolidated Total Assets” means the total consolidated assets of the Issuer and its Restricted Subsidiaries on a consolidated basis determined in accordance with GAAP, as shown on the most recent consolidated balance sheet of the Issuer; provided that, for purposes of calculating “Consolidated Total Assets” for purposes of testing the covenants under this Indenture in connection with any transaction, the total consolidated assets of the Issuer and its Restricted Subsidiaries shall be calculated on a Pro Forma Basis for the most recent Four-Quarter Period.

 

Consolidated Total Debt” means, as of any date of determination, the aggregate principal amount of indebtedness of the Issuer and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of indebtedness resulting from the application of purchase accounting in connection with any Asset Sale or Asset Acquisition), consisting of indebtedness for borrowed money, Capital Lease Obligations and debt obligations evidenced by promissory notes or similar instruments.

 

Consolidated Total Net Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Debt of the Issuer and its Restricted Subsidiaries on the date of determination less the aggregate amount of cash and Cash Equivalents of the Issuer and its Restricted Subsidiaries on a consolidated basis as of such date, to (b) Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the most recent Four-Quarter Period prior to such date for which the Issuer has internal financial statements available, in each case, calculated on a Pro Forma Basis.

 

Corporate Trust Office” means an office of the Trustee at which at any time its corporate trust business shall be administered, which office at the Issue Date is located at 60 Wall Street, 16th Floor, Mail Stop: NYC60-1630, New York, New York 10005, or such other address as the Trustee may designate from time to time by written notice to the Holders and the Issuer, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Issuer).

 

Credit Facilities” means (i) that certain ABL Credit Agreement, dated as of the November 29, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ABL Credit Facility”), by and among, inter alios, WS International, Williams Scotsman, Inc., WillScot Equipment II, LLC, and Williams Scotsman of Canada, Inc., as borrowers, Williams Scotsman Holdings Corp., Bank of America, N.A., as administrative agent and collateral agent, and the other lenders named therein, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, restated, supplemented, modified, renewed, refunded, replaced or refinanced from time to time, including any agreement extending the maturity thereof, refinancing, replacing, supplementing or otherwise restructuring all or any portion of the Debt thereunder or increasing or supplementing the amount loaned or issued thereunder or altering the maturity thereof whether pursuant to a credit agreement, indenture or other debt facility (any of the foregoing, an “Amendment”) and (ii) whether or not the financing agreement referred to in clause (i) remains outstanding, if designated by WS International to be included in the definition of “Credit Facilities,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, receivables financing (including through the sale of

 

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receivables to lenders or to a Receivables Subsidiary or other special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Debt, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time; provided, the Issuer and the Restricted Subsidiaries, taken as a whole, do not incur Debt pursuant to any Amendment defined in clause (i) or any Debt incurred under clause (ii) in an aggregate principal amount at any time outstanding in excess of the maximum aggregate principal amount of Debt permitted to be incurred pursuant to clause (i) of the definition of “Permitted Debt.”

 

Custodian” means any receiver, interim receiver, receiver and manager, trustee, assignee, liquidator, sequestrator or similar official under Bankruptcy Law or any other person with like powers.

 

Debt” means at any time (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person, or non-recourse, the following: (i) all indebtedness of such Person for money borrowed; (ii) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments; (iii) all obligations of such Person with respect to letters of credit (except letters of credit that are (x) secured by cash or Cash Equivalents, (y) issued under any Credit Facility or (z) securing obligations, other than obligations referred to in clauses (i), (ii) and (v), entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the 10th Business Day following payment on the letter of credit), bankers’ acceptances or similar facilities issued for the account of such Person; (iv) indebtedness for the deferred purchase price of property and all obligations created or arising under any conditional sale or other title retention agreement with respect to property or assets acquired by such Person(even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property or assets), in each case, excluding any trade payables or other current liabilities incurred in the ordinary course of business; (v) all Capital Lease Obligations (including Attributable Debt with regards to Sale and Leaseback Transactions) of such Person (but excluding obligations under operating leases); (vi) the maximum fixed redemption or repurchase price of Disqualified Stock in such Person at the time of determination; (vii) any Hedging Obligations of such Person at the time of determination (but taking into account only the mark-to-market value or, if any actual amount is due as a result of the termination or close-out of such transaction, that amount); and (viii) all obligations of the types referred to in clauses (i) through (vii) of this definition of another Person, the payment of which (A) such Person has Guaranteed or (B) is secured by (or the holder of such Debt has an existing right, whether contingent or otherwise, to be secured by) any Lien upon the property or other assets of such Person, even though such Person has not assumed or become liable for the payment of such Debt, in each case if and to the extent that any of the foregoing (other than clauses (iii) and (viii) of this definition) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP. For purposes of the foregoing: (a) the maximum fixed repurchase price of any Disqualified Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were repurchased on any date on which

 

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Debt shall be required to be determined pursuant to this Indenture; provided, however, that, if such Disqualified Stock is not then permitted to be repurchased, the repurchase price shall be the book value of such Disqualified Stock; (b) the amount outstanding at any time of any Debt issued with original issue discount is the principal amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt at such time as determined in conformity with GAAP; (c) the amount of any Debt described in clause (ix)(A) above shall be the maximum liability under any such Guarantee; (d) the amount of any Debt described in clause (ix)(B) above shall be the lesser of (I) the maximum amount of the obligations so secured and (II) the Fair Market Value of such property or other assets; and (e) interest, fees, premium, and expenses and additional payments, if any, will not constitute Debt.

 

Notwithstanding the foregoing, in connection with the purchase or sale by the Issuer or any of its Restricted Subsidiaries of any assets or business, the term “Debt” will exclude (x) customary indemnification obligations, (y) post-closing payment adjustments to which the other party may become entitled to the extent such payment is determined by a final closing balance sheet or such payment is otherwise contingent and (z) trade payments and accrued expenses, in each case arising in the ordinary course of business, and deferred or prepaid revenue; provided that the amount of such payment would not be required to be reflected on the face of a balance sheet prepared in accordance with GAAP.

 

The amount of Debt of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligations, of any contingent obligations at such date.

 

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

 

Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.3 as the Depositary with respect to the Notes, until a successor shall have been appointed pursuant to Section 2.6(b), and, thereafter, “Depositary” shall mean or include such successor.

 

Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration received by the Issuer or any of its Restricted Subsidiaries in connection with an Asset Sale that is designated as “Designated Non-cash Consideration” pursuant to an Officer’s Certificate setting forth the basis of determining the Fair Market Value thereof.

 

Disqualified Stock” means, with respect to any Person, any Capital Stock that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:

 

(1)         matures or is mandatorily redeemable under a sinking fund obligation or otherwise;

 

(2)         is convertible or exchangeable at the option of the holder thereof for Debt or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Issuer or any of its Subsidiaries); or

 

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

 

in each case on or prior to the day that is 91 days after the Stated Maturity of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring on or prior to the 91st day after the Stated Maturity of the Notes will not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital Stock are not more favorable, as measured by the purchase or redemption price or the breadth of the definition of the event or events triggering such purchase or redemption obligation to the holders of such Capital Stock than the provisions of Section 4.10 and Section 4.14, respectively, and any such requirement becomes operative only after compliance with such corresponding terms applicable to the Notes, including the purchase of any Notes tendered pursuant thereto; provided, further, that if such Capital Stock is issued to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations; and provided, further, that any Capital Stock held by any future, current or former employee, director, manager or consultant (or their respective trusts, estates, investment funds, investment vehicles or immediate family members) of the Issuer, any of its Subsidiaries or any direct or indirect parent thereof, in each case upon the termination of employment or death of such person pursuant to any stockholders’ agreement, management equity plan, stock option plan or any other management or employee benefit plan or agreement, shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer or its Subsidiaries or any direct or indirect parent of the Issuer.

 

DTC” means The Depository Trust Company.

 

Equity Interests” in any Person means all Capital Stock in such Person and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for Capital Stock) in such Person.

 

Escrow Account” has the meaning specified in the Escrow Agreement.

 

Escrow Agent” means Deutsche Bank Trust Company Americas, as escrow agent under the Escrow Agreement.

 

Escrow Agreement” means the Escrow and Security Agreement, dated as of August 3, 2018, among the Escrow Agent, the Issuer and the Trustee, as such agreement may be amended, restated, supplemented and/or modified from time to time.

 

Escrow Conditions” has the meaning specified in the Escrow Agreement.

 

Escrow Property” has the meaning specified in the Escrow Agreement.

 

Escrow Release Date” means the date that the ModSpace Acquisition occurs.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

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Excluded Subsidiary” means (a) any Subsidiary that is not a wholly-owned Subsidiary of the Issuer; (b) (i) any Subsidiary that is prohibited by any applicable law or, solely with respect to Subsidiaries existing on the Escrow Release Date or on the date such Subsidiary is acquired (provided, that such prohibition is not be created in contemplation of such acquisition), its organic documents from guaranteeing the Note Obligations, (ii) any Subsidiary that is prohibited by any contractual obligation existing on the Escrow Release Date or on the date any such Subsidiary is acquired from guaranteeing the Note Obligations (provided, that such prohibition is not created in contemplation of such acquisition) and (iii) to the extent that the provision of any Guarantee of the Note Obligations would require the consent, approval, license or authorization of any Governmental Authority which has not been obtained, any Subsidiary that is subject to such restrictions; provided that after such time that such restrictions on Guarantees are waived, lapse, terminate or are no longer effective, such Restricted Subsidiary shall no longer be an Excluded Subsidiary; (c) (i) any wholly-owned Subsidiary incorporated or organized under the laws of Canada or any province or territory of Canada or (ii) any wholly-owned Subsidiary organized under the laws of the United States, any state of the United States or the District of Columbia that (a) has no material assets other than Equity Interests of one or more Subsidiaries that are “controlled foreign corporations” within the meaning of Section 957(a) of the Code) or (b) is a Subsidiary of a Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957(a) of the Code) (provided any Subsidiary described in the foregoing clauses (c)(i) or (c)(ii) shall be an Excluded Subsidiary only with respect to the guarantee of an obligation of a United States person); (d) each Subsidiary that is not a Material Subsidiary, (e) any Subsidiary that is not a wholly-owned Subsidiary incorporated or organized under the laws of Canada or any province or territory of Canada or a wholly-owned Subsidiary organized under the laws of the United States, any state of the United States or the District of Columbia, (f) each Non-Recourse Subsidiary, (g) each Unrestricted Subsidiary and (h) any Subsidiary for which the provision of a Guarantee would result in a material adverse tax or regulatory consequence to the Issuer or one of its Subsidiaries, as applicable.

 

Fair Market Value” means, with respect to the consideration received or paid in any transaction or series of transactions, the fair market value thereof as determined in good faith by the Board of Directors of the Issuer.

 

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

 

GAAP” means generally accepted accounting principles in effect in the United States from time to time.

 

Global Note Legend” means the legend identified as such in Exhibit A hereto.

 

Global Notes” means the Notes in global form that are in the form of Exhibit A hereto, including the applicable legend or legends set forth in Exhibit A.

 

Governmental Authority” means any federal, state, territorial, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality, political subdivision, authority, corporation or body, regulatory or self-regulatory organization or other entity or officer exercising executive, legislative, judicial,

 

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statutory, regulatory or administrative functions for or pertaining to any government or court (including any supranational bodies such as the European Union), in each case whether it is or is not associated with the United States or any state, district or territory thereof, or any other foreign entity or government.

 

Guarantee” means, as applied to any Debt of another Person, a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner, of any part or all of such Debt. “Guaranteed” and “Guaranteeing” shall have meanings that correspond to the foregoing.

 

Hedging Obligations” means, with respect to the Issuer, any Guarantor or any of their respective Subsidiaries, any obligation of such Person pursuant to a Swap Contract.

 

Holder” means a Person in whose name a Note is registered on the Registrar’s books.

 

Holdings” means Williams Scotsman Holdings Corp., a Delaware corporation.

 

Incur” means, with respect to any Debt or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise become liable in respect of such Debt or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Debt or other obligation on the balance sheet of such Person; provided, however, that a change in GAAP that results in an obligation of such Person that exists at such time becoming Debt shall not be deemed an Incurrence of such Debt.  Debt otherwise Incurred by a Person before it becomes a Restricted Subsidiary of the Issuer shall be deemed to be Incurred at the time at which such Person becomes a Restricted Subsidiary of the Issuer. “Incurrence” “Incurred,” “Incurrable” and “Incurring” shall have meanings that correspond to the foregoing.  A Guarantee by the Issuer or a Restricted Subsidiary of Debt Incurred by the Issuer or a Restricted Subsidiary, as applicable, shall not be a separate Incurrence of Debt.  In addition, the following shall not be deemed a separate Incurrence of Debt:

 

(1)         amortization of debt discount or accretion of principal with respect to a non-interest bearing or other discount security;

 

(2)         the payment of regularly scheduled interest in the form of additional Debt of the same instrument or the payment of regularly scheduled dividends on Equity Interests in the form of additional Equity Interests of the same class and with the same terms;

 

(3)         the obligation to pay a premium in respect of Debt arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Debt; and

 

(4)         unrealized losses or charges in respect of Hedging Obligations.

 

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

 

Initial Purchasers” means each of AlbaCore Partners I Investment Holdings B Designated Activity Company and Canyon Value Realization Fund, L.P.

 

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Investment” means, with respect to any Person, all direct or indirect investments by such Person in other Persons in the form of loans, advances (or other extensions of credit) or capital contributions (by means of any transfer of cash or other property or assets to another Person or any other payments for property or services for the account or use of another Person), including the following: (i) the purchase or acquisition of any Equity Interest or other evidence of beneficial ownership in another Person; and (ii) the purchase, acquisition or Guarantee of the obligations of another Person, but shall exclude: (a) accounts receivable, notes receivable and other extensions of trade credit in the ordinary course of business; (b) other credits to suppliers in the ordinary course of business; (c) the acquisition of property and assets (including inventory, supplies, materials and equipment or licenses or leases of intellectual property); (d) the purchase or acquisition of the business,  assets or services of another Person; (e) prepaid expenses and workers’ compensation, utility, lease and similar deposits, in the ordinary course of business; (f) negotiable instruments held for collection and endorsements for collection or deposit; and (g) loans and advances to officers, directors and employees for commission, travel, entertainment, relocation and analogous ordinary business purposes, in each case, made in the ordinary course of business.  If the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Issuer such that, after giving effect to any such disposition, such Person is no longer a Restricted Subsidiary of the Issuer, the Issuer will be deemed to have made an Investment on the date of any such disposition equal to the Fair Market Value of the Issuer’s Investments in such Person that were not sold or disposed of.  The acquisition by the Issuer or any Restricted Subsidiary of the Issuer of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Issuer or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person.  Except as otherwise provided in this Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

 

Investment Grade Status” shall apply at any time the Notes receive both a rating equal to or higher than BBB- (or the equivalent) from S&P and a rating equal to or higher than Baa3 (or the equivalent) from Moody’s.

 

Issue Date” means August 3, 2018, the date on which Notes are originally issued under this Indenture.

 

Issuer” has the meaning set forth in the preamble hereto, until a successor replaces it in accordance with the applicable provisions of this Indenture and, thereafter, means the successor (it being understood that, for the avoidance of doubt, references herein to Permitted Debt, Permitted Liens, Permitted Investments, permitted agreements and/or other permitted transactions with respect to the Issuer and its Restricted Subsidiaries outstanding or in effect or existence on or as of the Issue Date are intended and shall be construed as references to WS International and its Restricted Subsidiaries, as if the Escrow Merger had occurred on the Issue Date rather than the Escrow Release Date).

 

Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York, or at a place of payment are authorized or required by law, regulation or executive order to remain closed. If a payment date in a place of payment is a Legal Holiday,

 

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payment shall be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

 

Lien” means any mortgage, pledge (including, without limitation, disclosed, undisclosed, possessory and non-possessory), security interest, hypothecation, assignment, statutory trust, deemed trust, privilege, lien, charge, bailment or similar encumbrance, whether statutory, based on common law, contract or otherwise, and including any option or agreement to give any of the foregoing, any filing of or agreement to give any financing statement under the Uniform Commercial Code or the Personal Property Security Act (Ontario) (or equivalent or successor statutes) of any jurisdiction to evidence any of the foregoing, any conditional sale or other title retention agreement, any reservation of ownership or any lease in the nature thereof.

 

Limited Condition Transaction” means any Investment or acquisition (whether by merger, amalgamation, consolidation or other business combination or the acquisition of Equity Interests or otherwise) whose consummation is not conditioned on the availability of, or on obtaining, third party financing.

 

Material Subsidiary” means, as at any date of determination, each Restricted Subsidiary of the Issuer (a) whose total assets (other than intercompany receivables) at the last day of the most recently ended Four-Quarter Period were equal to or greater than 2.5% of the Consolidated Total Assets of the Issuer and its Restricted Subsidiaries at such date or (b) whose gross revenues (other than revenues generated from sales to the Issuer or any of its Restricted Subsidiaries) for such Four-Quarter Period were equal to or greater than 2.5% of the consolidated gross revenues of the Issuer and its Restricted Subsidiaries for such period, in each case determined in accordance with GAAP.  Notwithstanding the foregoing, each Borrower (as defined in the ABL Credit Facility) that is a Subsidiary of the Issuer shall at all times be deemed to be a Material Subsidiary.

 

ModSpace” means Modular Space Holdings, Inc., a Delaware corporation.

 

ModSpace Acquisition” means the acquisition by WS International of all of the outstanding equity interests of ModSpace pursuant to the terms and conditions of the ModSpace Merger Agreement.

 

ModSpace Merger Agreement” means the Agreement and Plan of Merger, dated as of June 21, 2018, by and among WillScot Corporation, Mason Merger Sub, Inc., ModSpace and the holder representative named therein, together with all exhibits, annexes, schedules and other disclosure letters thereto, as such agreement may be amended, supplemented and/or otherwise modified from time to time.

 

Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

Net Cash Proceeds” means, with respect to Asset Sales of any Person, cash and Cash Equivalents received, net of: (i) the direct costs and expenses of such Person incurred in connection with such a sale, including all legal, tax, investment banking, accounting, title and recording tax expenses, broker or finder fees, commissions and other fees and expenses incurred and all federal, state, foreign and local taxes arising in connection with such an Asset Sale that are paid or required to be accrued as a liability under GAAP by such Person; (ii) all payments

 

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made by such Person on any Debt that is secured by such properties or other assets in accordance with the terms of any Lien upon or with respect to such properties or other assets or that must, by the terms of such Lien or such Debt, or in order to obtain a necessary consent to such transaction or by applicable law, be repaid to any other Person (other than the Issuer or any Restricted Subsidiary thereof) in connection with such Asset Sale; (iii) distributions and other payments made to minority interest holders in Restricted Subsidiaries of such Person as a result of such transaction and (iv) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP or amount placed in an escrow account or cash reserves for purposes of such an adjustment and escrowed amounts and amounts taken by the Issuer or its Restricted Subsidiaries as a reserve against liabilities associated with such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in accordance with GAAP; provided, however, that any non-cash consideration received in connection with any transaction, which is subsequently converted to cash, shall become Net Cash Proceeds only at such time as it is so converted.

 

Non-Recourse Debt” means Debt (a) as to which neither the Issuer nor any of its Restricted Subsidiaries (other than any Non-Recourse Subsidiaries) (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Debt) other than a pledge of the equity interests of any Non-Recourse Subsidiary, (ii) is directly or indirectly liable (as a guarantor or otherwise) other than by virtue of a pledge of the equity interests of any Non-Recourse Subsidiary, or (iii) constitutes the lender; (b) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against any Non-Recourse Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Debt (other than Debt under the Credit Facilities or the Notes) of the Issuer or any of its Restricted Subsidiaries to declare a default on such other Debt or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and (c) as to which the lenders thereunder will not have any recourse to the Equity Interests or assets of the Issuer or any of its Restricted Subsidiaries (other than the Non-Recourse Subsidiaries).

 

Non-Recourse Subsidiary” means any wholly-owned Subsidiary of the Issuer incorporated or organized under the laws of Canada or any province or territory of Canada, or under the laws of the United States, any state of the United States or the District of Columbia, which is created for the purpose of obtaining stand-alone financing for the acquisition and lease of rental equipment to customers, and all of whose Debt is Non-Recourse Debt.

 

Note Custodian” means the Trustee when serving as custodian for the Depositary with respect to the Global Notes, or any successor entity thereto.

 

Note Documents” means this Indenture, the Notes, the Note Guarantees and the Escrow Agreement.

 

Note Guarantee” means the Guarantee of the Notes, on a joint and several basis, by Holdings and each direct or indirect wholly-owned U.S. organized Restricted Subsidiary that guarantees the Debt under the 2017 Senior Secured Notes Indenture.

 

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Note Obligations” means the Obligations of the Issuer and the Guarantors under this Indenture and the Notes, to pay principal of, premium, if any, and interest when due and payable, and all other amounts due or to become due under or in connection with this Indenture, the Notes and the performance of all other obligations to the Trustee and the Holders under this Indenture and the Notes, according to the respective terms hereof and thereof.

 

Obligations” means all obligations of every nature of the Issuer and each other Guarantor from time to time owed to any agent or trustee, the Holders, any lenders in respect of Credit Facilities, noteholders in respect of the 2017 Senior Secured Notes or 2018 Senior Secured Notes, or any of them or their respective Affiliates, Hedging Obligations or Bank Product Obligations, whether for principal, interest or payments for early termination of Swap Contracts, fees, expenses, indemnification or otherwise and all guarantees of any of the foregoing and including any interest and fees that accrue after the commencement by or against any Person of any proceeding under any Bankruptcy Law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

Offer to Purchase” means a written offer (the “ Offer”) sent by the Issuer by first class mail, postage prepaid (or, to the extent permitted by applicable procedures or regulations, electronically), to each Holder at his address appearing in the security register on the date of the Offer, offering to purchase up to the aggregate principal amount of Notes set forth in such Offer at the purchase price set forth in such Offer (as determined pursuant to this Indenture). Unless otherwise required by applicable law, the Offer shall specify an expiration date (the “Expiration Date”) of the Offer to Purchase which shall be, subject to any contrary requirements of applicable law, not less than 30 days or more than 60 days after the date of mailing of such Offer and a settlement date (the “Purchase Date”) for purchase of Notes within five Business Days after the Expiration Date. The Issuer shall notify the Trustee at least 15 days (or such shorter period as is acceptable to the Trustee) prior to the delivery of the Offer of the Issuer’s obligation to make an Offer to Purchase, and the Offer shall be sent by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer. The Offer shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Offer to Purchase. The Offer shall also state:

 

(1)         the Section of this Indenture pursuant to which the Offer to Purchase is being made;

 

(2)         the Expiration Date and the Purchase Date;

 

(3)         the aggregate principal amount of the outstanding Notes offered to be purchased pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to Section 4.10);

 

(4)         the purchase price to be paid by the Issuer for each $1,000 principal amount of Notes accepted for payment (as specified pursuant to this Indenture);

 

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(5)         that the Holder may tender all or any portion of the Notes registered in the name of such Holder and that any portion of a Note tendered must be tendered in a minimum amount of $1,000 principal amount;

 

(6)         the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase, if applicable;

 

(7)         that, unless the Issuer defaults in making such purchase, any Note accepted for purchase pursuant to the Offer to Purchase will cease to accrue interest on and after the Purchase Date, but that any Note not tendered or tendered but not purchased by the Issuer pursuant to the Offer to Purchase will continue to accrue interest at the same rate;

 

(8)         that, on the Purchase Date, the Purchase Price will become due and payable upon each Note accepted for payment pursuant to the Offer to Purchase;

 

(9)         that each Holder electing to tender a Note pursuant to the Offer to Purchase will be required to surrender such Note or cause such Note to be surrendered at the place or places set forth in the Offer prior to the close of business on the Expiration Date (such Note being, if the Issuer or the Trustee so requires, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing);

 

(10)  that Holders will be entitled to withdraw all or any portion of Notes tendered if the Issuer (or its paying agent) receives, not later than the close of business on the fifth Business Day prior to the Expiration Date, a facsimile transmission or letter setting forth the name of the Holder, the aggregate principal amount of the Notes the Holder tendered, the certificate number of the Note the Holder tendered and a statement that such Holder is withdrawing all or a portion of his tender; and

 

(11)  if applicable, that, in the case of any Holder whose Note is purchased only in part, the Issuer shall execute, and the Trustee shall authenticate and deliver to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder, in the aggregate principal amount equal to and in exchange for the unpurchased portion of the aggregate principal amount of the Notes so tendered.

 

Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Chief Accounting Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice-President of such Person.

 

Officer’s Certificate” means a certificate signed by an Officer of the Issuer or a Guarantor, as applicable.

 

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Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or any Subsidiary of the Issuer.

 

Outside Date” means December 18, 2018.

 

Pari Passu Debt” means (1) the Notes and any Debt which ranks equally in right of payment to the Notes and (2) with respect to any Guarantor, its Note Guarantee and any Debt which ranks equally in right of payment to such Guarantor’s Note Guarantee.

 

Participant” means, with respect to DTC, a Person who has an account with DTC, including the Euroclear System and Clearstream Banking, S.A.

 

Paying Agent” means any Person authorized by the Issuer to pay the principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance, covenant defeasance or similar payment with respect to, any Notes on behalf of the Issuer.

 

Permitted Business” means any business similar in nature to any business conducted by WS International and its Restricted Subsidiaries on the Issue Date and any business reasonably ancillary, incidental, complementary or related to the business conducted by WS International and its Restricted Subsidiaries on the Issue Date, or a reasonable extension, development or expansion thereof, in each case, as determined in good faith by the Board of Directors of WS International.

 

Permitted Debt” means

 

(i)                           Debt of WS International or any Restricted Subsidiary under the Credit Facilities (including amounts outstanding on the Issue Date) in an aggregate principal amount at any one time outstanding not to exceed the greater of (x) $1,800.0 million and (y) the Borrowing Base;

 

(ii)                        Debt outstanding under the Notes (excluding any Additional Notes, but including any PIK Notes issued from time to time to pay PIK Interest in accordance with the terms of this Indenture) and contribution, indemnification and reimbursement obligations owed by the Issuer or any Guarantor to any of the other of them in respect of amounts paid or payable on such Notes, and any Refinancing Debt with respect to the foregoing;

 

(iii)                     Guarantees of the Notes, including any Refinancing Debt is respect thereof;

 

(iv)                    (A) Debt of WS International or any of its Subsidiaries (including any unused commitment) existing on the Issue Date (including the 2017 Senior Secured Notes) (other than Debt described in clause (i), (ii) or (iii) above) and (B) any Refinancing Debt with respect to the foregoing; provided that, the incurrence of any such Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A);

 

(v)                       intercompany Debt owed to the Issuer or to any of its Restricted Subsidiaries; provided that if such Debt is owed by the Issuer or any Guarantor to a Restricted Subsidiary that is

 

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not a Guarantor, such Debt shall be subordinated in right of payment to the prior payment in full of the Issuer’s or such Guarantor’s Note Obligations;

 

(vi)                    Guarantees Incurred by the Issuer of Debt of a Restricted Subsidiary otherwise permitted to be incurred under this Indenture;

 

(vii)                 Guarantees by the Issuer or any of its Restricted Subsidiaries of Debt of the Issuer or any of its Restricted Subsidiaries, including Guarantees by any Restricted Subsidiary of Debt under Credit Facilities; provided that (a) such Debt is Permitted Debt or is otherwise Incurred in accordance with Section 4.9 and (b) such Guarantees are subordinated in right of payment to the Note Guarantees to the same extent, if any, as the Debt being guaranteed is subordinated in right of payment to the Notes;

 

(viii)              Debt incurred in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits, property, casualty or liability insurance or self-insurance obligations, indemnity, bid, performance, warranty, release, appeal, surety and similar bonds or obligations, bankers’ acceptances, bank guarantees, letter of credit, warehouse receipt, completion guarantees and similar facilities, or other Debt with respect to reimbursement type obligations regarding the foregoing, in each case, provided or incurred (including Guarantees thereof) by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;

 

(ix)                    the Incurrence of Hedging Obligations by the Issuer or any of its Restricted Subsidiaries except Hedging Obligations entered into for speculative purposes;

 

(x)                       (A) the Incurrence of Debt (including Debt comprised of Capital Lease Obligations, mortgage financings or purchase money obligations and Debt arising under leases entered into in connection with a Sale and Leaseback Transaction not prohibited by this Indenture), Disqualified Stock or preferred stock by the Issuer or any of its Restricted Subsidiaries, in each case, Incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation or improvement of, or repairs, improvements or additions to property (real or personal), plant or equipment used or useful in the business of the Issuer or any of its Restricted Subsidiaries; provided that at the time of Incurrence of any such Debt, the aggregate amount of Debt outstanding under this clause (x)(A) does not exceed the greater of (x) $85.0 million and (y) 3.1% of Consolidated Total Assets and (B) any Refinancing Debt in respect of each of the foregoing; provided that, the Incurrence of any such Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A);

 

(xi)                    Debt arising from agreements of the Issuer or any of its Restricted Subsidiaries providing for indemnification, contribution, earnout, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Equity Interests of a Restricted Subsidiary otherwise permitted under this Indenture;

 

(xii)                 the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:

 

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(a)         any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer or its Restricted Subsidiaries (other than to the extent secured by a Permitted Lien) ; and

 

(b)         any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Issuer (other than to the extent secured by a Permitted Lien);

 

shall be deemed, in each case, to constitute an issuance of such preferred stock by the Issuer or such Restricted Subsidiary that was not permitted by this clause (xii);

 

(xiii)              Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds; provided, however, that such Debt is extinguished within ten Business Days after the Issuer receiving notice of the Incurrence thereof;

 

(xiv)             (A) additional Debt of the Issuer and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $85.0 million and (y) 3.1% of Consolidated Total Assets and (B) any Refinancing Debt with respect thereto; provided, that the Incurrence of such Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A);

 

(xv)                Refinancing Debt in respect of Debt Incurred pursuant to the first paragraph of Section 4.9;

 

(xvi)             (A) Debt Incurred by Restricted Subsidiaries that are not Guarantors in an aggregate principal amount at any one time outstanding not to exceed the greater of (x) $100.0 million and (y) 3.6% of Consolidated Total Assets as of the last date of the most recently ended Four-Quarter Period and (B) any Refinancing Debt with respect thereto; provided, that the Incurrence of such Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A);

 

(xvii)          (A) Non-Recourse Debt of any Non-Recourse Subsidiary; provided that the aggregate Debt incurred under this clause (xvii) at any one time outstanding does not exceed $50.0 million and (B) any Refinancing Debt with respect thereto; provided, that the Incurrence of such Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A);

 

(xviii)       Debt of the Issuer or any of its Restricted Subsidiaries consisting of the financing of insurance premiums or “take or pay” obligations in the ordinary course of business;

 

(xix)             Debt consisting of unsecured promissory notes or similar Debt issued by the Issuer or any of its Restricted Subsidiaries to current, future or former officers, directors and employees thereof, or to their respective estates, spouses or former spouses, successors, executors, administrators, heirs, legatees or distributees, in each case to finance the purchase or redemption of Equity Interests the Issuer to any direct or indirect parent thereof to the extent described in clause (iv) of the second paragraph of Section 4.7 and (B) any Refinancing Debt with respect thereto; provided that, the incurrence of any such

 

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Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A);

 

(xx)                Debt Incurred by the Issuer or any of its Restricted Subsidiaries, to the extent that the net proceeds thereof are promptly deposited with the Trustee to redeem the Notes in full or to defease or to satisfy and discharge the Notes;

 

(xxi)             (A) Debt of any Receivables Subsidiary pursuant to a Qualified Receivables Transaction in respect of any Qualified Receivables Transaction that is without recourse to the Issuer or any Restricted Subsidiary or any of their respective assets (other than pursuant to Standard Securitization Undertakings) and (B) any Refinancing Debt with respect to the foregoing; provided that, the incurrence of any such Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A);

 

(xxii)          (A) (i) Acquired Debt or (ii) other Debt of such Persons or the Issuer or any of its Restricted Subsidiaries Incurred (x) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary of the Issuer (including being designated as a Restricted Subsidiary) or was otherwise acquired by, or merged into or amalgamated, arranged or consolidated with the Issuer or any of its Restricted Subsidiaries or (y) otherwise in connection with, or in contemplation of, such acquisition, merger, amalgamation, arrangement or consolidation; provided, however, in each case set forth in clause (x) or (y), that, on a Pro Forma Basis, after giving effect to the incurrence of such Debt and the related transactions, the Issuer’s Consolidated Total Net Leverage Ratio shall not exceed 5.25 to 1.00 and (B) any Refinancing Debt with respect thereto;

 

(xxiii) Debt of the Issuer and any of its Restricted Subsidiaries in respect of Cash Management Agreements and other Debt in respect of netting services, employees’ credit or purchase cards, overdraft protections and similar arrangements, in each case, entered into in the ordinary course of business;

 

(xxiv) customer deposits and advance payments received in the ordinary course of business from customers of goods and services purchased in the ordinary course of business;

 

(xxv)         (A) Debt in an aggregate principal amount equal to the net cash proceeds from the substantially concurrent issuance or sale (other than to a Subsidiary of the Issuer and other than in connection with the Transactions) of Equity Interests of the Issuer that are not Disqualified Stock or the net cash proceeds of any capital contribution to the Issuer from any direct or indirect parent of the Issuer (and the amount of such net cash proceeds shall be excluded from the calculation of Restricted Payments permitted by the first paragraph of Section 4.7) and (B) any Refinancing Debt with respect thereto;

 

(xxvi) (A) Debt Incurred in connection with any Sale and Leaseback Transaction permitted under Section 4.13 in an aggregate amount at any time outstanding not to exceed the greater of (x) $40.0 million and (y) 1.5% of Consolidated Total Assets and (B) any Refinancing Debt with respect thereto; provided, that the Incurrence of such Refinancing Debt shall not be deemed to have refreshed capacity under the foregoing clause (A); and

 

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(xxvii) (A) Debt arising under the 2018 Senior Secured Notes and (B) any Refinancing Debt in respect thereof.

 

Permitted Holder” means the Sponsor, its Affiliates and/or the Sponsor Affiliates (in each case, including, as applicable, related funds and general partners thereof).

 

Permitted Investments” means:

 

(a)         Investments (i) in existence on, or contemplated as of, the Issue Date and set forth in Schedule 1 to this Indenture or (ii) in connection with the Transactions as contemplated by the ModSpace Merger Agreement and, in each case, any extension, modification, renewal or reinvestment of any such Investments, but only to the extent not involving additional advances, contributions or increases thereof (other than as a result of accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms thereof); provided that the amount of any such Investments may be increased (x) as otherwise permitted under this Indenture or (y) as required by the terms of such Investment as in existence on the Issue Date;

 

(b)         Investments required pursuant to any agreement or obligation of the Issuer or any of its Restricted Subsidiaries (as set forth on Schedule 1 to this Indenture) in effect on the Issue Date, to make such Investments;

 

(c)          Investments in (x) cash and assets constituting Cash Equivalents at the time made and (y) the Notes (by way of purchase or other acquisition);

 

(d)         Investments in property and other assets, owned or used by the Issuer or any of its Restricted Subsidiaries in the operation in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries of a Permitted Business;

 

(e)          Investments by the Issuer or any of its Restricted Subsidiaries in the Issuer or any of its Restricted Subsidiaries;

 

(f)           Investments by the Issuer or any of its Restricted Subsidiaries in a Person, if (A) as a result of such Investment such Person becomes a Restricted Subsidiary and a Guarantor, or (B) in connection with such Investment such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated or wound-up into, the Issuer or any of its Restricted Subsidiaries that are Guarantors;

 

(g)          Investments represented by Hedging Obligations not for speculative purposes;

 

(h)         Investments received or acquired (x) in settlement, compromise, partial or full satisfaction, or resolution of obligations owed to the Issuer or any of its Restricted Subsidiaries, including pursuant to bankruptcy, insolvency or similar proceedings (including as a result of any workout, reorganization or recapitalization), (y) on account of any claim or Lien against, or interest in, any other Person or its properties as a result of a foreclosure or enforcement by the Issuer or any of its

 

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Restricted Subsidiaries with respect to such claim or Lien against, or interest in, such other Person or its properties, or (z) in compromise or resolution of any litigation, arbitration or other disputes (including those arising in the ordinary course of business) with Persons who are not Affiliates of the Issuer;

 

(i)             Investments consisting of loans and advances to officers, directors, consultants and employees (i) in connection with such Person’s purchase of Equity Interests in any direct or indirect parent of the Issuer and (ii) otherwise, in an amount not to exceed in the aggregate at any one time outstanding the greater of (x) $5.0 million and (y) 0.2% of Consolidated Total Assets;

 

(j)            Investments in any Person to the extent the consideration for such Investments consist solely of Equity Interests that are not Disqualified Stock of the Issuer or Equity Interests of any direct or indirect parent of the Issuer;

 

(k)         any Investment in any Person to the extent such Investment represents the non-cash portion of the consideration received in connection with an Asset Sale consummated in compliance with Section 4.10 or any other sale, transfer or other disposition of property not constituting an Asset Sale;

 

(l)             Investments in the ordinary course of business consisting of UCC Article 4 customary trade arrangements with customers consistent with past practices;

 

(m)     payroll, travel and similar advances that are made in the ordinary course of business;

 

(n)         guarantees of (x) Debt of the Issuer or any Restricted Subsidiary of the Issuer permitted by Section 4.9 and (y) leases (other than capital leases) of the Issuer or any Restricted Subsidiary of the Issuer or other obligations of the Issuer or any Restricted Subsidiary that do not constitute Debt entered into in the ordinary course of business;

 

(o)         Investments by any Restricted Subsidiary that is not a Guarantor in a Receivables Subsidiary in connection with a Qualified Receivables Transaction;

 

(p)         Investments of WS International in the Escrow Issuer;

 

(q)         [reserved];

 

(r)            cash or Cash Equivalents or other property deposited in the ordinary course of business to secure (or to secure letters of credit, banker’s acceptances or bank guarantees in connection with) the performance of statutory obligations (including obligations under worker’s compensation, unemployment insurance or similar legislation), surety or appeal bonds, customs bonds, leases, bids, agreements or other obligations under arrangements with utilities, insurance agreements, construction agreements, government contracts, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

 

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(s)           Investments of a Person existing at the time such Person becomes a Restricted Subsidiary of the Issuer or at the time such Person is acquired or otherwise merges or consolidates with the Issuer or any of its Restricted Subsidiaries, in each case, in compliance with this Indenture; provided that such Investments were not made by such Person in connection with or in contemplation of such acquisition, merger or consolidation;

 

(t)            [reserved];

 

(u)         [reserved]; and

 

(v)         other Investments not otherwise permitted under this definition in an aggregate amount, when taken together with all other Investments made pursuant to this clause (v) that are at the time outstanding, not to exceed the greater of (a) $30.0 million and (b) 1.1% of Consolidated Total Assets as of the last date of the most recently ended Four-Quarter Period;

 

provided, however, that with respect to any Investment, the Issuer may, in its sole discretion, at any time allocate or re-allocate all or any portion of such Investment to one or more of the above clauses (a) through (v) so that all or a portion of such Investment would be a Permitted Investment.

 

The amount of any Investment shall be measured on the date each such Investment was made and without giving effect to subsequent changes in value other than as a result of repayments of loans or advances, redemptions, returns of capital, sales or other dispositions thereof or similar events.

 

Permitted Liens” means:

 

(a)         Liens existing on the Issue Date (including Liens in respect of the 2017 Senior Secured Notes) or pursuant to agreements in existence on the Issue Date, other than pursuant to clause (b) below;

 

(b)         Liens to secure Credit Facilities and other Debt incurred pursuant to clause (i) of the definition of “Permitted Debt”;

 

(c)          Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith, if such proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor or for property taxes on property if the Issuer or one of its Restricted Subsidiaries has determined to abandon such property and if the sole recourse for such tax, assessment, charge, levy or claim is to such property;

 

(d)         Liens imposed or permitted by applicable federal, state, provincial, municipal, territorial, local or statutory law, rules or regulations, including, but not limited to, carrier’s, freight forwarder’s, warehousemen’s, materialmen’s, repairmen’s,

 

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logger’s, contractor’s, supplier of materials, architects’, mechanic’s, landlord’s or other similar Liens and inchoate statutory Liens arising under ERISA, in each case, incurred in the ordinary course of business for sums not then due or payable or past due by more than 60 days (or which are being contested in good faith and, to the extent necessary to prevent the forfeiture or sale of the property or assets subject to any such Lien, by appropriate proceedings);

 

(e)          survey exceptions, encumbrances, ground leases, easements or reservations of; or rights of others for, licenses, rights-of-way, servitudes, drains, sewers, utilities (including Liens securing the payment of charges for hydroelectricity), electric lines, telegraph and telephone and cable television lines and other similar purposes, or zoning, building codes, or other similar restrictions (including minor defects and irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Debt and which do not in the aggregate materially impair the operation of the business of the Issuer and its Restricted Subsidiaries, taken as a whole;

 

(f)           Liens, pledges, deposits and security (i) in connection with workers’ compensation, unemployment insurance, employers’ health tax, social security benefits and other types of statutory obligations, insurance related obligations or the requirements of any official body (including, but not limited to, in respect of deductibles, self-insured retention amounts and premiums and adjustments thereto); (ii) to secure the performance of tenders, bids, surety, warranty, release, appeal or performance bonds, leases, purchase, construction, sales or servicing contracts and other similar obligations Incurred in the ordinary course of business consistent with industry practice; (iii) to secure indemnification obligations (including to obtain or secure obligations with respect to letters of credit, Guarantees, bonds or other sureties or assurances) given in connection with the activities described in clauses (i) and (ii) above, in each case not Incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property or services; (iv) arising in connection with any attachment or judicial proceeding unless the Liens so arising shall not be satisfied or discharged or stayed pending appeal within 60 days after the entry thereof or the expiration of any such stay; or (v) to secure the payment or performance of statutory or public obligations (including environmental, municipal and public utility commission obligations and requirements);

 

(g)          Liens (x) on property or shares of stock or other assets of a Person existing at the time such Person is merged with or into or consolidated or amalgamated with the Issuer or any of its Restricted Subsidiaries; provided, that such Liens were not created or incurred in the contemplation of such merger, consolidation or amalgamation and do not extend to any assets other than those of the Person merged with or into or consolidated or amalgamated with the Issuer or any Restricted Subsidiary (other than after-acquired property that is (1) affixed or appurtenant thereto or incorporated into the property covered by such Lien, (2) after-acquired property of such Person subject to a Lien securing such Debt, the

 

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terms of which Debt require or include a pledge of after-acquired property and (3) the proceeds and products thereof or improvements thereon); (y) on property (including Capital Stock) existing at the time of acquisition of the property by the Issuer or any of its Restricted Subsidiaries; provided, that such Liens were in existence prior to such acquisition, and not incurred in contemplation of, such acquisition; and (z) on assets, property or shares of Equity Interests of another Person at the time such other Person becomes a Subsidiary of the Issuer or any of its Restricted Subsidiaries; provided, however, that (A) the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than after-acquired property that is (1) affixed or appurtenant thereto or incorporated into the property covered by such Lien, (2) after-acquired property of such Person subject to a Lien securing such Debt, the terms of which Debt require or include a pledge of after-acquired property and (3) the proceeds and products thereof or improvements thereon) and (B) such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Restricted Subsidiary;

 

(h)         Liens in favor of the Issuer or any of its Restricted Subsidiaries; provided that if such Liens are on the assets of a Guarantor, such Liens are in favor of the Issuer or another Guarantor;

 

(i)             other Liens (not securing Debt) incidental to the conduct of the business of the Issuer or any of its Restricted Subsidiaries, as the case may be, or the ownership of their assets which do not in the aggregate materially adversely affect the value of such assets, taken as a whole, or materially impair the operation of the business of the Issuer and its Restricted Subsidiaries, taken as a whole;

 

(j)            Liens to secure any Refinancing Debt incurred in compliance with this Indenture to refinance Debt secured by Liens referred to in clauses (a), (g), (m), (o), (u), (gg), (hh), (mm), (nn) or (pp) of this definition or to this clause (j); provided that (x) such Liens do not extend to any property or assets other than the property or assets securing the Debt being extended, renewed, refinanced or refunded and after-acquired property affixed or incorporated in the property covered by such Lien or subject to a Lien securing such Debt and (y) the principal amount (or accreted value, if applicable) of the obligations secured by such Liens is not increased (except to the extent of any premiums, underwriting discounts, original issue discount and other fees, commissions, expenses paid and transaction costs incurred in connection with such extension, renewal, refinancing or refunding);

 

(k)         Liens in favor of customs or revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods in the ordinary course of business;

 

(l)             Liens arising out of licenses, leases, sublicenses and subleases of assets (including real property and intellectual property rights) or on vehicles or equipment, in each case, in the ordinary course of business;

 

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(m)     Liens securing Debt (including Capital Lease Obligations) permitted to be incurred pursuant to clause (x) of the definition of “Permitted Debt,” covering only the property or assets (or property affixed or appurtenant thereto and any proceeds thereof) acquired with or financed by such Debt;

 

(n)         Liens upon specific items of inventory or other goods (and the proceeds thereof) of any Person securing such Person’s obligation in respect of banker’s acceptances or trade letters of credit issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment, or storage of such inventory or other goods;

 

(o)         Liens securing Debt (or Obligations in respect of such Debt) Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person; provided, however, that the Lien may not extend to any property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property acquired, constructed, purchased, leased, repaired or improved with the proceeds of such Debt or affixed or appurtenant thereto and any proceeds and products thereof), and the Debt (other than any interest thereon) secured by the Lien must be permitted by Section 4.9;

 

(p)         banker’s Liens, Liens that are contractual rights of set-off and similar Liens (A) relating to the establishment of depository relations with banks not given in connection with the issuance of Debt, (B) relating to pooled deposit or sweep accounts of the Issuer or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations and other cash management activities incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries or (C) relating to purchase orders and other agreements entered into with customers of the Issuer or any of its Restricted Subsidiaries in the ordinary course of business and (ii) Liens of a collection bank arising under Section 4-210 of the UCC (or any comparable or successor provision) on items in the course of collection, (X) encumbering reasonable customary initial deposits and margin deposits and attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business, and (Y) in favor of banking institutions arising as a matter of law or pursuant to customary account agreements encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry ;

 

(q)         Liens (i) arising by reason of any judgment, order or decree, but not giving rise to an Event of Default, (ii) arising pursuant to an order of attachment, condemnation, eminent domain, distraint or similar legal process arising in connection with legal proceedings, but not giving rise to an Event of Default, (iii) that are required to protect or enforce rights in any administrative, arbitration or other court proceeding in the ordinary course of business, but not giving rise to an Event of Default so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may

 

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be initiated has not expired and (iv) arising out of judgments or awards with regard to which an appeal or other proceeding for review is in process;

 

(r)            Deposits made or other security in the ordinary course of business to secure liability to insurance carriers and Liens securing insurance premium financing arrangements ;

 

(s)           Liens arising from UCC financing statement filings (including as a precautionary measure) in connection with Capital Lease Obligations permitted to be incurred pursuant to clause (x) of the definition of “Permitted Debt,” operating leases or consignments entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business, in each case, covering only the property or assets (or property affixed or appurtenant thereto and any proceeds thereof) acquired with, financed by or subject to such leases or consignments;

 

(t)            Liens on the assets of a Restricted Subsidiary that is not a Guarantor securing Debt and other obligations of a Restricted Subsidiary that is not a Guarantor incurred in compliance with this Indenture (including Liens incurred in connection with a Qualified Receivables Transaction);

 

(u)         [reserved];

 

(v)         Liens (i) on assets purported to be sold or otherwise transferred to a Receivables Subsidiary, (ii) over bank accounts of the Issuer or any Restricted Subsidiary, into which assets of the Qualified Receivables Transaction are paid or (iii) on Equity Interests in a Receivables Subsidiary or on assets of a Receivables Subsidiary, in each case, created, incurred or arising in connection with a Qualified Receivables Transaction;

 

(w)       any customary provisions limiting the disposition or distribution of assets or property (including Equity Interests) or any related restrictions thereon in joint venture, partnership, membership, stockholder and limited liability company agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements, including owners’ participation or similar agreements governing projects owned through an undivided interest; provided, however, that any such limitation is applicable only to the assets that are the subjects of such agreements;

 

(x)         Liens granted by a Person in favor of a commercial trading counterparty pursuant to a netting agreement, which Liens encumber rights under agreements that are subject to such netting agreement and which Liens secure such Person’s obligations to such counterparty under such netting agreement; provided that any such agreements and netting agreements are entered into in the ordinary course of business; and provided, further, that the Liens are incurred in the ordinary course of business and when granted, do not secure obligations which are past due;

 

(y)         Liens securing Hedging Obligations permitted to be incurred under this Indenture;

 

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(z)          Liens on raw materials or on manufactured products as security for any drafts or bills of exchange drawn in connection with the importation of such raw materials or manufactured products ;

 

(aa)       Liens consisting of conditional sale, title retention, consignment or similar arrangements for the sale of goods acquired by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;

 

(bb)       any pledge of the Equity Interests of an Unrestricted Subsidiary to secure Debt or other obligations of such Unrestricted Subsidiary;

 

(cc)         Liens on any cash earnest money deposits made by the Issuer or any Restricted Subsidiary in connection with any letter of intent or purchase agreement;

 

(dd)       Liens in the nature of the right of setoff in favor of counterparties to contractual agreements with the Issuer or any Restricted Subsidiary in the ordinary course of business;

 

(ee)         Liens arising by operation of law under Article 2 of the Uniform Commercial Code in favor of a reclaiming seller of goods or buyer of goods;

 

(ff)           Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Debt;

 

(gg)         Liens Incurred in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries with respect to Obligations in an aggregate principal amount that does not exceed $30.0 million at any one time outstanding;

 

(hh)       Liens securing Obligations in respect of Debt incurred pursuant to clause (xxii) of the definition of the term “Permitted Debt” so long as, on a Pro Forma Basis, after giving effect to the incurrence of such Debt and any related transactions, the Consolidated Secured Net Debt Ratio for the most recently ended Four-Quarter Period the date on which such Debt is Incurred would have been no greater than 4.50 to 1.00, determined on a Pro Forma Basis;

 

(ii)               Liens arising or imposed under ERISA or the Code in connection with any “plan” (as defined in ERISA); provided that reasonable and appropriate provision has been made in accordance with GAAP for the payment of the obligations secured thereby;

 

(jj)             Liens on accounts receivable and any assets related thereto, customarily created in connection with sales, assignments, transfers or other dispositions of accounts receivable in transactions not involving the Incurrence of Debt, and entered into in the ordinary course of business and consistent with past practice;

 

(kk)       Liens securing Cash Management Agreements and related Obligations entered into in the ordinary course of business;

 

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(ll)                    Liens (x) deemed to exist in connection with Permitted Investments in repurchase agreements, (y) on cash advances in favor of the seller of any property to be acquired in an Investment to be applied against the purchase price for such Investment or (z) consisting of an agreement to sell, transfer, lease or otherwise dispose of any property in a transaction permitted under this Indenture in each case, solely to the extent such Investment or sale, disposition, transfer or lease, as the case may be, would have been permitted on the date of creation of such Lien;

 

(mm) Liens securing Obligations in respect of Debt incurred pursuant to the first paragraph of Section 4.9; provided, that (x) on a Pro Forma Basis, after giving effect to the incurrence of such Debt and any related transactions, the Consolidated Secured Net Debt Ratio for the most recently ended Four-Quarter Period the date on which such Debt is Incurred would have been no greater than 4.50 to 1.00, determined on a Pro Forma Basis;

 

(nn)            other Liens securing obligations which do not exceed an amount at any one time outstanding equal to the greater of (x) $75.0 million and (y) 2.7% of Consolidated Total Assets;

 

(oo)            any extensions, modifications, refundings, substitutions, replacements or renewals (or successive extensions, refundings, replacements or renewals) of the foregoing;

 

(pp)            Liens to secure the 2018 Senior Secured Notes and other Debt incurred pursuant to clause (xxvii) of the definition of “Permitted Debt”; and

 

(qq)            Liens pursuant to the Escrow Agreement and Liens on any escrow account and deposits therein granted in favor of the trustee of the 2018 Senior Secured Notes as provided in the 2018 Senior Secured Notes Indenture.

 

Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, limited partnership, Governmental Authority or other entity.

 

Pro Forma Basis” means, with respect to the calculation of any test, financial ratio, basket or covenant under this Indenture, including for purposes of determining the Consolidated Total Net Leverage Ratio, the Consolidated Secured Net Debt Ratio, and Consolidated Total Assets, of any Person and its Restricted Subsidiaries, or the Borrowing Base, as of any date, that pro forma effect will be given to the transactions and events giving rise to the need to make such calculation, including any acquisition, merger, amalgamation, consolidation, Investment, Incurrence of Debt (including Debt issued, Incurred or assumed or repaid or redeemed as a result of, or to finance, any relevant transaction and for which any such test, financial ratio, basket or covenant is being calculated), any other issuance or redemption of preferred stock or Disqualified Stock, Asset Sales or other sales, transfers and other dispositions or discontinuance of any Subsidiary, lines of business, divisions, segments or operating units, any operational change (including the entry into any material contract or arrangement) or any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or of an Unrestricted Subsidiary as a Restricted Subsidiary, in each case, that have occurred during the Issuer’s four most recent full

 

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fiscal quarters for which internal financial statements are available immediately preceding the date of the transaction or event giving rise to the need to make such calculation (such four full fiscal quarter period being referred to herein as the “Four-Quarter Period”), or subsequent to the end of such Four-Quarter Period but on or prior to or simultaneously with the date of calculation or event or transaction for which a determination under this definition is made (including any such event occurring at a Person who became a Restricted Subsidiary of the subject Person or was merged, amalgamated or consolidated with or into the subject Person or any other Restricted Subsidiary of the subject Person after the commencement of the applicable Four-Quarter Period), as if each such event and transaction occurred on the first day of that Four-Quarter Period.  Whenever pro forma effect is to be given with respect to a transaction or event pursuant to this definition, pro forma calculations with respect thereto may include the amount of “run-rate” cost savings, operating expense reductions (including as a result of entering into any material contract or arrangement, strategic initiatives and purchasing improvements) charges attributable to the undertaking and/or implementation of cost savings initiatives and improvements, business optimization and other restructuring and integration charges and other synergies resulting from or relating to such transaction or event projected by the Issuer in good faith to be realized as a result of actions taken or with respect to which substantial steps have been taken or are expected to be taken (calculated on a Pro Forma Basis as though such net costs savings, operating expense reductions, charges and other synergies had been realized on the first day of such period and as if such net costs savings, operating expense reductions, charges and other synergies were realized during the entirety of such period and such that “run-rate” means the full recurring benefit for a period that is associated with any action taken, for which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with Public Company Costs) net of the amount of actual benefits realized during such period from such actions), and any such adjustments shall be included in the initial pro forma calculations of such financial ratios, tests baskets or covenants relating to such transaction or event (and in respect of any subsequent pro forma calculations in which such transaction or costs savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Four-Quarter Period for any subsequent calculation of such financial ratios, tests, baskets and covenants; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Issuer as set forth in an Officer’s Certificate of the Issuer, (B) such amounts have been realized, or specified actions are taken or are reasonably expected to be taken, within 18 months of the date of such transaction, (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period, (D) the aggregate amount of such adjustments during any Four Quarter Period shall not exceed 15% of the Consolidated EBITDA of the Issuer and its Restricted Subsidiaries, determined on a Pro Forma Basis, and (E) notwithstanding the foregoing, but without duplication of any adjustments described in clause (D), for any time period that includes the date that is twenty-four (24) months following the Escrow Release Date, the aggregate amount of net cost savings, operating expense reductions, charges attributable to the undertaking and/or implementation of cost savings initiatives and improvements, business optimization and other restructuring and integration charges, and other synergies for such period set forth in the model delivered to the agent under the ABL Credit Facility on June 5, 2018 (without duplication of any amounts added back pursuant to any other clauses) projected by the Issuer in good faith to result from actions taken or

 

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expected to be taken within twenty-four (24) months following the Escrow Release Date (calculated on a pro forma basis as though such net cost savings, operating expense reductions, charges and other synergies had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions (including, without limitation, business optimization costs, charges and expenses, costs and expenses incurred in connection with new product design, development and introductions, costs and expenses incurred in connection with intellectual property development and new systems design, and costs and expenses incurred in connection with the implementation, replacement, development or upgrade of operational, reporting and information technology systems and technology initiatives); provided that (x) such net cost savings, operating expense reductions, charges or other synergies are reasonably identifiable (in the good faith determination of the Issuer) and quantifiable four quarter period in which such net cost savings, operating expense reductions, charges or other synergies are reflected in Consolidated EBITDA, and (y) no net cost savings, operating expense reductions, charges or other synergies shall be added pursuant to this clause (E) to the extent duplicative of any expenses or charges relating to such net cost savings and operating improvements or synergies that are otherwise included or added back to Consolidated EBITDA.  Any calculation may include adjustments appropriate to reflect all adjustments included in the calculation of adjusted Consolidated EBITDA set forth in the Offering Memorandum, dated November 21, 2017, as supplemented on November 28, 2017, related to the issuance of the 2017 Senior Secured Notes.

 

For purposes of making any computation referred to above:

 

(1)         if any Debt bears a floating rate of interest and is being given pro forma effect, the interest on such Debt shall be calculated as if the rate in effect on the date for which a determination under this definition is made had been the applicable rate for the entire period (taking into account any hedging obligations applicable to such Debt);

 

(2)         interest on a Capital Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capital Lease Obligation in accordance with GAAP;

 

(3)         interest on any Debt under a revolving credit facility computed on a Pro Forma Basis shall be computed based upon the average daily balance of such Debt during the applicable period;

 

(4)         interest on Debt that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate; and

 

To the extent not already covered above, any such calculation may include adjustments calculated in accordance with Regulation S-X under the Securities Act of 1933, as amended.

 

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Public Company Costs” means costs relating to compliance with the provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, as applicable to companies with equity or debt securities held by the public, the rules of national securities exchange companies with listed equity or debt securities, directors’ or managers’ compensation, fees and expense reimbursement, costs relating to investor relations, shareholder meetings and reports to shareholders or debtholders, directors’ and officers’ insurance and other executive costs, legal and other professional fees, and listing fees.

 

Purchase Money Note” means a promissory note of a Receivables Subsidiary to the Issuer or any of its Restricted Subsidiaries, which note must be repaid from cash available to the Receivables Subsidiary, other than amounts required to be established as reserves pursuant to agreements, amounts paid to investors in respect of interest, principal and other amounts owing to such investors and amounts paid in connection with the purchase of newly generated receivables. The repayment of a Purchase Money Note may be subordinated to the repayment of other liabilities of the Receivables Subsidiary on terms determined in good faith by the Issuer to be substantially consistent with market practice in connection with Qualified Receivables Transactions.

 

Qualified Receivables Transaction” means any transaction or series of transactions entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its Subsidiaries sells, conveys or otherwise transfers to (a) a Receivables Subsidiary (in the case of a transfer by the Issuer or any of its Subsidiaries) and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in or pledge, any accounts receivable or interests therein (whether now existing or arising in the future) of the Issuer or any of its Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such accounts receivable, all contracts and contract rights, purchase orders, security interests, financing statements or other documentation in respect thereof, and all Guarantees, indemnities, warranties or other documentation or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and any other assets which are customarily transferred, or in respect of which security interests are customarily granted, in connection with asset securitization transactions involving accounts receivable and any collections or proceeds of the foregoing.

 

Receivables Subsidiary” means a Subsidiary of the Issuer:

 

(1)         that engages in no activities other than activities in connection with the financing of accounts receivable of the Issuer and/or its Restricted Subsidiaries;

 

(2)         that is designated by the Board of Directors of the Issuer as a Receivables Subsidiary pursuant to a resolution set forth in an Officer’s Certificate and delivered to the Trustee;

 

(3)         no portion of the Debt or any other obligation (contingent or otherwise) of which (a) is at any time Guaranteed by the Issuer. or any of its Restricted Subsidiaries (excluding Guarantees of obligations (other than the principal of, and interest on, Debt) pursuant to Standard Securitization Undertakings), (b) is at any time recourse to or obligates the Issuer or any of its Restricted Subsidiaries in any way,

 

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other than pursuant to Standard Securitization Undertakings or (c) subjects any asset of the Issuer or any other Restricted Subsidiary of the Issuer (other than accounts receivable and related assets as provided in the definition of “Qualified Receivables Transaction”), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

 

(4)         with which neither the Issuer nor any of its Restricted Subsidiaries has any material contract, agreement, arrangement or understanding other than (a) those entered into in the ordinary course of business on terms no less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer, (b) fees payable in the ordinary course of business in connection with servicing accounts receivable and (c) any Purchase Money Note issued by such Receivables Subsidiary to the Issuer or any of its Restricted Subsidiaries; and

 

(5)         with respect to which neither the Issuer nor any other Restricted Subsidiary of the Issuer has any obligation to maintain or preserve such Subsidiary’s financial condition or cause such Subsidiary to achieve certain levels of operating results.

 

Redemption Price,” when used with respect to any Note to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

 

Refinancing Debt” means Debt that refunds, refinances, renews, replaces, repays, purchases, redeems, defeases, retires or extends any Debt permitted to be Incurred by the Issuer or any of its Restricted Subsidiaries pursuant to the terms of this Indenture, whether involving the same or any other lender or creditor or group of lenders or creditors, but only to the extent that

 

(i)             the Refinancing Debt is subordinated in right of payment to the Notes to at least the same extent as the Debt being refunded, refinanced, renewed, replaced, repaid, purchased, redeemed, defeased, retired or extended, if such Debt was subordinated in right of payment to the Notes,

 

(ii)          the Refinancing Debt is scheduled to mature either (a) no earlier than the Debt being refunded, refinanced, renewed, replaced, repaid, purchased, redeemed, defeased, retired or extended or (b) at least 91 days after the maturity date of the Notes,

 

(iii)       the Refinancing Debt has a weighted average life to maturity at the time such Refinancing Debt is Incurred that is equal to or greater than the weighted average life to maturity of the Debt being refunded, refinanced, renewed, replaced, repaid, repurchased, redeemed, defeased, retired or extended,

 

(iv)      such Refinancing Debt is in an aggregate principal amount that is less than or equal to the sum of (a) the aggregate principal or accreted amount (in the case of any Debt issued with original issue discount) then outstanding under the Debt being refunded, refinanced, renewed, replaced, repaid, purchased, redeemed, defeased, retired or extended, (b) the amount of accrued and unpaid interest and

 

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premiums (including tender premiums), if any, on such Debt being refunded, refinanced, renewed, replaced, repaid, purchased, redeemed, defeased, retired or extended and (c) the amount of all fees (including underwriting discounts and other arranger fees), commissions, expenses and costs (including original issue discounts or similar payments Incurred in connection therewith) related to the Incurrence of such Refinancing Debt, and

 

(v)         such Refinancing Debt shall not include (x) Debt of a Restricted Subsidiary that is not a Guarantor that refinances Debt of the Issuer or a Guarantor that could not have been initially Incurred by such Restricted Subsidiary pursuant to Section 4.9 or(y) Debt of the Issuer or a Restricted Subsidiary that refinances Debt of an Unrestricted Subsidiary.

 

Registrar” means any Person authorized by the Issuer to maintain the Note Register.

 

Replacement Assets” means (i) assets not classified as current assets under GAAP that are used or useful in a Permitted Business, (ii) all or substantially all of the assets of, or any Equity Interests of, another Permitted Business, if, after giving effect to any such acquisition of Equity Interests, the Permitted Business is or becomes a Restricted Subsidiary of the Issuer or (iii) Equity Interests constituting a minority interest in any Person that at such time is a Restricted Subsidiary of the Issuer.

 

Resale Restriction Termination Date” has the meaning set forth in the Restricted Notes Legend.

 

Responsible Officer” means, when used with respect to the Trustee, any officer of the Trustee within the Corporate Trust Office (or any successor unit or department including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer, or any other officer of the Trustee who customarily performs functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for administration of this Indenture.

 

Restricted Notes Legend” means the legend identified as such in Exhibit A hereto.

 

Restricted Payment” is defined to mean any of the following:

 

(a)         any dividend or other distribution declared and paid on the Equity Interests in the Issuer or any of its Restricted Subsidiaries to the direct or indirect holders thereof in their capacity as such (other than any dividends or distributions to the extent payable in Equity Interests (other than Disqualified Stock) and dividends or distributions payable to the Issuer or any of its Restricted Subsidiaries (and if such Restricted Subsidiary has stockholders other than the Issuer or other Restricted Subsidiaries, to its stockholders on no more than a pro rata basis));

 

(b)         any payment made by the Issuer or any of its Restricted Subsidiaries (other than to the extent payment is made in Equity Interests (other than Disqualified Stock)) to purchase, redeem, acquire or retire for value any Equity Interests in the Issuer

 

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or any of its Restricted Subsidiaries (including any issuance of Debt in exchange for such Equity Interests or the conversion or exchange of such Equity Interests into or for Debt) other than any such Equity Interests held by the Issuer or any of its Restricted Subsidiaries;

 

(c)          any payment made by the Issuer or any of its Restricted Subsidiaries (other than to the extent payment is made in Equity Interests (other than Disqualified Stock)) to redeem, purchase, repurchase, defease or otherwise acquire or retire for value, prior to the scheduled final maturity, scheduled repayment or schedule sinking fund payment, any Debt (excluding any intercompany Debt between the Issuer and any of its Restricted Subsidiaries or among Restricted Subsidiaries of the Issuer) that is contractually subordinated in right of payment to the Notes or any Note Guarantee (it being understood that payments of regularly scheduled principal and interest and mandatory prepayments, redemptions or offers to purchase shall be permitted), except payments of principal or interest in anticipation of satisfying a sinking fund obligation or final maturity, in each case, within one year of the due date thereof; or

 

(d)         any Investment the Issuer or any of its Restricted Subsidiaries in any Person, other than a Permitted Investment.

 

Restricted Subsidiary” means the Issuer and any Subsidiary of the Issuer that is not an Unrestricted Subsidiary.

 

S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, and its successors.

 

Sale and Leaseback Transaction” means any direct or indirect arrangement, or series of arrangements, pursuant to which property, real or personal, now owned or hereafter acquired by the Issuer or any of its Restricted Subsidiaries is sold, transferred or otherwise disposed of to a Person and in connection therewith is thereafter rented or leased back by the Issuer or any of its Restricted Subsidiaries from such Person with the intention to use for substantially the same purpose or purposes as the property being sold, transferred or disposed.

 

SEC” means the Securities and Exchange Commission and any successor thereto. “Securities Act” means the Securities Act of 1933, as amended.

 

Senior Management” means the chief executive officer and the chief financial officer of the Issuer.

 

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

 

Sponsor” means TDR Capital LLP, a limited liability company organized under the laws of England and Wales, having its registered office at 20 Bentinck, London W1U 2EU and being registered with Companies House under number OC302604.

 

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Sponsor Affiliates” means (a) TDR Capital II Holdings LP (as hereinafter used in this definition, the “TDR Investor”) and any other fund (including, without limitation, any unit trust, investment trust, limited partnership or general partnership) which is advised by, or the assets of which are managed (whether solely or jointly with others) from time to time by, the Sponsor or the TDR Investor (or a group controlled by and whose members include the Sponsor and/or the TDR Investor or their Affiliates (other than Holdings or any of its Subsidiaries or any portfolio company of the Sponsor or the TDR Investor)); and (b) any other fund (including, without limitation, any unit trust, investment trust, limited partnership or general partnership) of which the Sponsor or the TDR Investor (or a group controlled by and whose members include the Sponsor and/or the TDR Investor or their Affiliates (other than Holdings or any of its Subsidiaries or any portfolio company of the Sponsor or the TDR Investor)) or the TDR Investor’s general partner, trustee or nominee, is a general partner, manager, adviser, trustee or nominee (but, for the avoidance of doubt, excluding any of Holdings or any of its Subsidiaries or any portfolio company of the Sponsor or the TDR Investor).

 

Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Issuer or any of its Subsidiaries which are reasonably customary in an accounts receivable securitization transaction in connection with a Qualified Receivables Transaction.

 

Stated Maturity,” when used with respect to any Debt (including the Notes) or any installment of interest thereon, means the date specified in the instrument governing such Debt as the fixed date on which the principal of such Debt or such installment of interest is due and payable, and will not include any contingent obligations to repay, redeem or repurchase any such principal or interest prior to the date originally scheduled for the payment thereof.

 

Subsidiary” means, with respect to any Person, (a) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (b) any partnership, joint venture, limited liability company or similar entity of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and (y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

 

Swap Contract” means (a) any and all interest rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options for forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing),

 

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whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including such obligations or liabilities under any such master agreement.

 

TIA” means the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).

 

Transaction Expenses” means any fees or expenses incurred or paid by the Issuer or its Restricted Subsidiaries in connection with the Transactions.

 

Transactions” means the transactions necessary to effect the ModSpace Acquisition, including (a) the merger contemplated by the ModSpace Merger Agreement, (b) the Escrow Merger and related arrangements, (c) any other transactions contemplated by the ModSpace Merger Agreement (including the repayment of outstanding indebtedness of ModSpace and its subsidiaries), (d) the issuance by WillScot Corporation of equity securities and usage of the proceeds thereof to finance the ModSpace Acquisition (e) the issuance of the 2018 Senior Secured Notes on or prior to the Escrow Release Date, (f) borrowings under the ABL Credit Facility in connection with the ModSpace Acquisition (and any amendments to the ABL Credit Facility to permit the consummation thereof) and (g) the payment of any Transaction Expenses.

 

Transfer Restricted Notes” means Notes that bear or are required to bear the Restricted Notes Legend.

 

Treasury Rate” means with respect to the Notes, at any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to August 15, 2019; provided, however, that if no published maturity exactly corresponds with such date, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities; provided further, however, that if the period from such redemption date to August 15, 2019, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

Trustee” has the meaning set forth in the preamble to this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and, thereafter, means the successor.

 

UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other applicable jurisdiction.

 

U.S. Government Obligation” means:

 

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(1)         any security which is: (x) a direct obligation of the United States of America the payment of which the full faith and credit of the United States of America is pledged or (y) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally Guaranteed as a full faith and credit obligation of the United States of America, which, in either case, is not callable or redeemable at the option of the issuer thereof; and

 

(2)         any depository receipt issued by a bank (as defined in the Securities Act) as custodian with respect to any U.S. Government Obligation and held by such bank for the account of the holder of such depository receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depository receipt.

 

Voting Stock” of a Person means all classes of Capital Stock or other interests(including partnership interests) of such Person then outstanding entitling the holders thereof generally to vote on the election of members of the Board of Directors or comparable body of such Person.

 

SECTION 1.2 Other Definitions.

 

Term

 

Defined in Section

“ABL Credit Facility”

 

1.1; “Credit Facilities”

“Act”

 

12.15

“Advanced Offer to Purchase”

 

4.14

“Affiliate Transaction”

 

4.11

“Agent Members”

 

2.6

“Applicable Premium Deficit”

 

8.8

“Authentication Order”

 

2.2

“Change of Control Offer”

 

4.14

“covenant defeasance”

 

8.3

“defeasance”

 

8.3

“Discharge”

 

8.8

“Escrow Issuer”

 

Preamble

“Escrow Merger”

 

Preamble

“Event of Default”

 

6.1

“Excess Proceeds”

 

4.10

“Expiration Date”

 

1.1

“Four-Quarter Period”

 

1.1

“Guarantor”

 

4.17

“IAI Global Note”

 

2.1

“Initial Notes”

 

Preamble

“Institutional Accredited Investor”

 

2.1

“legal defeasance”

 

8.2

 

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Term

 

Defined in Section

“Note Register”

 

2.3

“Notes”

 

Preamble

“Offer”

 

1.1

“Offer Amount”

 

3.8

“Payment Default”

 

6.1

“PIK Payment”

 

2.1(a)

“PIK Notes”

 

2.1(a)

“Purchase Date”

 

1.1

“Purchase Price”

 

4.14

“QIB”

 

2.1

“QIB Global Note”

 

2.1

“rate(s) of exchange”

 

12.17

“redemption date”

 

3.1

“Regulation S”

 

2.1

“Regulation S Global Note”

 

2.1

“Restricted Period”

 

2.14

“Reversion Date”

 

4.21

“Rule 144A”

 

2.1

“Surviving Entity”

 

5.1

“Suspended Covenants”

 

4.21

“Suspension Period”

 

4.21

“Unrestricted Subsidiary”

 

4.18

 

SECTION 1.3 Trust Indenture Act Term.

 

The following TIA term used in this Indenture has the following meaning:

 

obligor” on the Notes and the Note Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.

 

SECTION 1.4 Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

(3)                                 “or” is disjunctive and not necessarily exclusive;

 

(4)                                 words in the singular include the plural, and in the plural include the singular;

 

(5)                                 “including” means including without limitation;

 

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(6)                                 unless otherwise specified, any reference to a Section or an Article refers to such Section or Article of this Indenture;

 

(7)                                 references to sections of or rules under the Securities Act, the Exchange Act or the TIA shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time; and

 

(8)                                 References to “$” are to U.S. Dollars.

 

Article II

 

THE NOTES

 

SECTION 2.1 Form and Dating.

 

The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication.  Subject to the issuance of PIK Notes or the increase in the principal amount of a Global Note in order to evidence PIK Interest (which PIK Notes or increased principal amount of a Global Note shall be in denominations of $1.00 or any integral multiples of $1.00 in excess thereof), the Notes shall be issued only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.  On any Interest Payment Date on which the Issuer pays interest all or in part in PIK Interest (a “PIK Payment”) with respect to a Global Note, the Trustee shall increase the principal amount of such Global Note by an amount equal to the interest payable as PIK Interest, rounded up to the nearest whole dollar, for the relevant interest period on the principal amount of such Global Note as of the relevant record date for such Interest Payment Date, to the credit of the Holders on such record date and an adjustment shall be made on the books and records of the Trustee with respect to such Global Note to reflect such increase. On any Interest Payment Date on which the Issuer makes a PIK Payment by issuing Definitive Notes (a “PIK Note”), the principal amount of any such PIK Note issued to any Holder, for the relevant interest period as of the relevant record date for such Interest Payment Date, shall be rounded up to the nearest whole dollar.

 

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture, and the Issuer, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

(a)                                 The Notes shall be issued initially in the form of one (1) or more Global Notes substantially in the form attached as Exhibit A hereto, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee as custodian for the Depositary, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

 

Each Global Note shall represent such of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Notes from

 

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time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, a PIK Payment, redemptions and transfers of interests. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with written instructions given by the Holder thereof as required by Section 2.6.

 

Except as set forth in Section 2.6, the Global Notes may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor of the Depositary or its nominee.

 

(b)                                 The Initial Notes are being issued by the Issuer only to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act (“Rule 144A”)) (“QIBs”), outside the United States to persons other than U.S. persons in reliance upon Regulation S under the Securities Act (“Regulation S”) and to institutions that are “accredited investors” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBS (“Institutional Accredited Investors”).  Initial Notes to non-U.S. persons that are Transfer Restricted Notes may be transferred to (i) QIBs, in reliance on Rule 144A, (ii) outside the United States, pursuant to Regulation S, (iii) an Institutional Accredited Investor, in reliance on an exemption from the registration requirements of the Securities Act, other than Rule 144A, Rule 144 of the Securities Act or Regulation S or (iv) the Issuer, in accordance with Section 2.14. Initial Notes that are offered in reliance on Rule 144A shall be issued in the form of one (1) or more permanent Global Notes substantially in the form set forth in Exhibit A (the “QIB Global Note”) deposited with the Trustee, as Notes Custodian, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. Initial Notes that are resold in offshore transactions in reliance on Regulation S shall be issued in the form of one (1) or more Global Notes substantially in the form set forth in Exhibit A (the “Regulation S Global Note”) deposited with the Trustee, as Notes Custodian, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.  Initial Notes that are offered to an Institutional Accredited Investor, other than in reliance on Rule 144A, Regulation S or Rule 144 of the Securities Act, shall be issued in the form of one (1) or more permanent Global Notes substantially in the form set forth in Exhibit A (the “IAI Global Note”) deposited with the Trustee, as Notes Custodian, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.  The QIB Global Note, the Regulation S Global Note and the IAI Global Note shall each be issued with separate CUSIP numbers. The aggregate principal amount of each Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as Notes Custodian. Transfers of Notes to QIBs, pursuant to Regulation S or to Institutional Accredited Investors shall be represented by appropriate increases and decreases to the respective amounts of the appropriate Global Notes, as more fully provided in Section 2.14.

 

(c)                                  Section 2.1(b) shall apply only to Global Notes deposited with or on behalf of the Depositary.

 

The Issuer shall execute and the Trustee shall, upon receipt of an Authentication Order, in accordance with Section 2.1(b) and Section 2.2, authenticate and deliver the Global Notes, which (i) shall be registered in the name of the Depositary or the nominee of the Depositary and (ii)

 

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shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instructions or held by the Trustee as Note Custodian for the Depositary.

 

The Trustee shall have no responsibility or obligation to any Holder, any member of(or a Participant in) DTC or any other Person with respect to the accuracy of the records of DTC (or its nominee) or of any Participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery of any notice (including any notice of redemption) or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to the Notes. The Trustee may rely (and shall be fully protected in relying) upon information furnished by DTC with respect to its members, Participants and any owners of beneficial interests in the Notes.

 

(d)                                 Notes issued in certificated form, including Global Notes, shall be substantially in the form of Exhibit A attached hereto.

 

SECTION 2.2 Execution and Authentication.

 

An Officer shall sign the Notes for the Issuer by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

 

A Note shall not be valid until authenticated by the manual signature of a Responsible Officer of the Trustee. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee will, upon receipt of a written order of the Issuer signed by one Officer of the Issuer (an “Authentication Order”), (a) authenticate Notes for original issue up to the aggregate principal amount of the Notes that may be validly issued under this Indenture including (i) Initial Notes for original issuance in an aggregate principal amount of $200,000,000 and (ii) subject to compliance with Sections 4.9 and 4.12, any Additional Notes or PIK Notes for original issuance from time to time after the Issue Date and (b) increase the principal amount of any Global Notes as a result of a PIK Payment. Such order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and, if such Notes are PIK Notes, whether such Notes shall be PIK Notes or an increase in the principal amount of any Global Note as a result of a PIK Payment.

 

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate Notes. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes to the same extent that the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or the Issuer or an Affiliate of the Issuer.

 

SECTION 2.3 Registrar; Paying Agent.

 

The Issuer shall maintain (i) an office or agency (which may be an office of the Trustee or an affiliate of the Trustee) where Notes may be presented to a Registrar for registration of

 

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transfer or for exchange and (ii) an office or agency (which may be an office of the Trustee or an affiliate of the Trustee) where Notes may be presented to a Paying Agent for payment. The Registrar shall keep a register of the Notes (the “Note Register”) and of their transfer and exchange. The Issuer may appoint one (1) or more co-registrars and one (1) or more paying agents; provided, however, that at all times there shall be only one (1) Note Register. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without notice to any Holder. The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.

 

The Issuer shall notify the Trustee of the name and address of any Agent not a party to this Indenture. The Issuer shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which shall incorporate the provisions of Section 317(b) of the TIA. The agreement shall implement the provisions of this Indenture that relate to such Agent.

 

The Issuer initially appoints the Trustee to act as the Registrar and Paying Agent and initially designates the Corporate Trust Office of the Trustee as the office or agency of the Issuer for such purposes.

 

The Issuer initially appoints DTC to act as the Depositary with respect to the Global Notes.

 

SECTION 2.4 Paying Agent to Hold Money in Trust.

 

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and shall notify the Trustee of any Default by the Issuer in making any such payment. While any such Default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary thereof) shall have no further liability for the money. If the Issuer or a Subsidiary thereof acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon the occurrence of events specified in clause (8) of the first paragraph of Section 6.1, the Trustee shall serve as Paying Agent for the Notes.

 

SECTION 2.5 Holder Lists.

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least seven (7) Business Days before each interest payment date, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders, including the aggregate principal amount of the Notes held by each Holder thereof.

 

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SECTION 2.6 Book-Entry Provisions for Global Securities.

 

(a)                                 Each Global Note shall (i) be registered in the name of the Depositary for such Global Notes or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear legends as required by Section 2.6(e).

 

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

 

(b)                                 Transfers of a Global Note shall be limited to transfers of such Global Note in whole, but not in part, to the Depositary, its successors or their respective nominees. Beneficial interests in a Global Note may be transferred in accordance with Section 2.14 and the rules and procedures of the Depositary. In addition, Certificated Notes shall be transferred to all owners of a beneficial interest in exchange for their beneficial interests only if the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for the Global Notes or the Depositary ceases to be a “clearing agency” registered under the Exchange Act and a successor depositary is not appointed by the Issuer within ninety (90) days of such notice.

 

(c)                                  In connection with the transfer of the entire Global Note to owners of beneficial interests pursuant to clause (b) of this Section 2.6, such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall upon receipt of an Authentication Order authenticate and deliver, to each owner of a beneficial interest identified in writing by the Depositary in exchange for its beneficial interest in such Global Note an equal aggregate principal amount of Certificated Notes of authorized denominations.

 

(d)                                 The registered holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and persons that may hold an interest through Agent Members, to take any action which a Holder is entitled to take under this Indenture or any Note.

 

(e)                                  Each Global Note shall bear the Global Note Legend on the face thereof. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of one or more temporary Global Notes bearing the Temporary Regulation S Notes Legend.

 

(f)                                   At such time as all beneficial interests in Global Notes have been exchanged for Certificated Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to or retained by the Trustee and cancelled in accordance with Section 2.11. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Certificated Notes, redeemed, repurchased or cancelled, the principal amount of Notes represented by such Global

 

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Note shall be reduced accordingly and an endorsement shall be made on such Global Note, by the Trustee or the Note Custodian at the direction of the Trustee, to reflect such reduction.

 

(g)                                  General provisions relating to transfers and exchanges, subject to Section 2.14:

 

(i)                                     To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Certificated Notes at the Registrar’s request.

 

(ii)                                  No service charge shall be made to a Holder for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any stamp or transfer tax or similar governmental charge payable in connection therewith (other than any such stamp or transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.2, 2.10, 3.6, 4.10, 4.14 and 9.4 hereto).

 

(iii)                               All Global Notes and Certificated Notes issued upon any registration of transfer or exchange of Global Notes or Certificated Notes shall, upon execution by the Issuer and authentication by the Trustee in accordance with the provisions hereof, be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Certificated Notes surrendered upon such registration of transfer or exchange.

 

(iv)                              The Registrar shall not be required (A) to issue, to register the transfer of or to exchange Notes during a period beginning at the opening of fifteen (15) days before the day of any mailing of a notice of Notes selected for redemption under Section 3.2 and ending at the close of business on the day of mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

 

(v)                                 Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes, and neither the Trustee, any Agent nor the Issuer shall be affected by notice to the contrary.

 

(vi)                              The Trustee shall authenticate Global Notes and Certificated Notes in accordance with the provisions of Section 2.2. Except as provided in Section 2.6(b), neither the Trustee nor the Registrar shall authenticate or deliver any Certificated Note in exchange for a Global Note.

 

(vii)                           Each Holder agrees to provide indemnity reasonably satisfactory to the Issuer and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder’s Note in violation of any provision of this Indenture and/or applicable United States federal or state securities law.

 

(viii)                        The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or

 

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under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Agent Members or owners of beneficial interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

SECTION 2.7 Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee, or the Issuer and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note, the Issuer shall execute and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of (i) the Trustee to protect the Trustee and (ii) the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge a Holder for their expenses in replacing a Note.

 

Every replacement Note shall be an obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

 

SECTION 2.8 Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.8 as not outstanding. Except as set forth in Section 2.9, a Note does not cease to be outstanding because the Issuer or a Subsidiary of the Issuer holds the Note.

 

If a Note is replaced pursuant to Section 2.7, it ceases to be outstanding except to the extent otherwise required by applicable law.

 

If the principal amount of any Note is considered paid under Section 4.1, it ceases to be outstanding and interest on it ceases to accrue.

 

If the Paying Agent (other than the Issuer or a Subsidiary thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

SECTION 2.9 Treasury Notes.

 

In determining whether the Holders of the required aggregate principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer or by any Affiliate of the Issuer shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes shown on the Notes Register as being so owned shall be so disregarded. Notwithstanding the foregoing, Notes that are to be acquired by the Issuer or an Affiliate of the

 

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Issuer pursuant to an exchange offer, tender offer or other agreement shall not be deemed to be owned by such entity until legal title to such Notes passes to such entity.

 

SECTION 2.10 Temporary Notes.

 

Until Certificated Notes are ready for delivery, the Issuer may prepare and the Trustee shall, upon receipt of an Authentication Order, authenticate temporary Notes. Temporary Notes shall be substantially in the form of Certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall execute and the Trustee shall, upon receipt of an Authentication Order, authenticate Certificated Notes in exchange for temporary Notes.

 

Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.

 

SECTION 2.11 Cancellation.

 

The Issuer at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder or which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Trustee upon the receipt of a cancellation request from the Issuer signed by an Officer. All Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation if surrendered to any Person other than the Trustee, shall be delivered to the Trustee. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation. Subject to Section 2.7, the Issuer may not issue new Notes to replace Notes that it has redeemed or paid or that have been delivered to the Trustee for cancellation. All cancelled Notes held by the Trustee shall be cancelled and disposed of in accordance with its customary practice, and certification of their cancellation delivered to the Issuer upon written request.

 

SECTION 2.12 [Reserved].

 

SECTION 2.13 CUSIP Number.

 

The Issuer in issuing or otherwise dealing with the Notes may use a “CUSIP” and/or ISIN or other similar number, and if it does so, the Issuer may use the CUSIP and/or ISIN or other similar number in notices of redemption or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP and/or ISIN or other similar number printed in the notice or on the Notes and that reliance may be placed only on the other identification numbers printed on the Notes. The Issuer shall promptly notify the Trustee in writing of any change in the CUSIP and/or ISIN or other similar number.

 

SECTION 2.14 Special Transfer Provisions.

 

Unless and until a Transfer Restricted Note is transferred or exchanged pursuant to an exemption under the Securities Act or under an effective registration statement under the Securities Act the following provisions shall apply:

 

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(a)                                 Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Transfer Restricted Note to a QIB in accordance with Rule 144A:

 

(i)                                     The Registrar shall register the transfer of a Transfer Restricted Note by a Holder to a QIB if such transfer is being made by a proposed transferor who has provided the Registrar with (a) an appropriately completed certificate of transfer in the form attached to the Note and (b) a letter substantially in the form set forth in Exhibit B hereto.

 

(ii)                                  If the proposed transferee is an Agent Member and the Transfer Restricted Note to be transferred consists of an interest in the Regulation S Global Note or the IAI Global Note, upon receipt by the Registrar of (x) the items required by paragraph (i) above and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures therefor, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the QIB Global Note in an amount equal to the principal amount of the beneficial interest in the Regulation S Global Note or IAI Global Note, as the case may be, to be so transferred, and the Registrar shall reflect on its books and records the date and an appropriate decrease in the principal amount of such Regulation S Global Note or IAI Global Note, as applicable.

 

(b)                                 Transfers Pursuant to Regulation S. On or after the termination of the Restricted Period (as defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), interests in a Global Note bearing the Temporary Regulation S Notes Legend shall be exchangeable for corresponding interests in a Global Note. Prior to the expiration of the Restricted Period, transfers of beneficial interests in a Global Note bearing the Temporary Regulation S Notes Legend may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Transfers of beneficial interests in a Global Note bearing the Temporary Regulation S Notes Legend only may be transferred upon (A) delivery by a beneficial owner of an interest therein to the Depositary or its nominee (as the case may be) of a written certification in the form of Exhibit C, and (b) delivery by the transferee of such interest to the Depositary or its nominee (as the case may be) of a written certification in the form of Exhibit C. After the expiration of the Restricted Period, the Registrar shall register the transfer of any Regulation S Global Note without requiring any additional certification. The following provisions shall apply with respect to registration of any proposed transfer of a Transfer Restricted Note pursuant to Regulation S:

 

(i)                                     The Registrar shall register any proposed transfer of a Transfer Restricted Note pursuant to Regulation S by a Holder if such transfer is being made by a proposed transferor who has provided the Registrar with (a) an appropriately completed certificate of transfer in the form attached to the Note and (b) a written certificate in the form of Exhibit C hereto.

 

(ii)                                  If the proposed transferee is an Agent Member and the Transfer Restricted Note to be transferred consists of an interest in a QIB Global Note or an IAI Global Note, upon receipt by the Registrar of (x) the items required by paragraph (i) above and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures therefor, the Registrar shall reflect on its books and records the date and an increase in

 

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the principal amount of the Regulation S Global Note in an amount equal to the principal amount of the beneficial interest in the QIB Global Note or the IAI Global Note, as applicable, to be transferred, and the Registrar shall reflect on its books and records the date and an appropriate decrease in the principal amount of the QIB Global Note or the IAI Global Note, as applicable.

 

(c)                                  Transfers to Institutional Accredited Investors. The following provisions shall apply with respect to the registration of any proposed transfer of a Transfer Restricted Note to an Institutional Accredited Investor (other than in reliance on Rule 144A, Regulation S or Rule 144 of the Securities Act):

 

(i)                                     The Registrar shall register the transfer of a Transfer Restricted Note by a Holder to an Institutional Accredited Investor if such transfer is being made by a proposed transferor who has provided the Registrar with (a) an appropriately completed certificate of transfer in the form attached to the Note and (b) a letter substantially in the form set forth in Exhibit D hereto.

 

(ii)                                  If the proposed transferee is an Agent Member and the Transfer Restricted Note to be transferred consists of an interest in the Regulation S Global Note or the QIB Global Note, upon receipt by the Registrar of (x) the items required by paragraph (i) above and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures therefor, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the IAI Global Note in an amount equal to the principal amount of the beneficial interest in the Regulation S Global Note or QIB Global Note, as the case may be, to be so transferred, and the Registrar shall reflect on its books and records the date and an appropriate decrease in the principal amount of such Regulation S Global Note or QIB Global Note, as applicable.

 

(d)                                 [Reserved].

 

(e)                                  Restricted Notes Legend. Upon the transfer, exchange or replacement of Notes not bearing the Restricted Notes Legend, the Registrar shall deliver Notes that do not bear the Restricted Notes Legend. Until the Resale Restriction Termination Date, upon the transfer, exchange or replacement of Notes bearing the Restricted Notes Legend, the Registrar shall deliver only Notes that bear the Restricted Notes Legend unless there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Issuer to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. On and after the Resale Restriction Termination Date, upon the transfer, exchange or replacement of Notes bearing the Restricted Notes Legend, which transfer, exchange or replacement may be initiated by the Issuer, the Registrar shall deliver Notes that do not bear the Restricted Notes Legend. Upon request by any Holder, the Issuer shall cooperate to have the Restricted Notes Legend removed if the Issuer has determined such legend is no longer required. At any time on or after the Resale Restriction Termination Date with respect to a Note, if such Note is represented by one or more Global Notes that are Restricted Notes, the Issuer shall remove the Restricted Notes Legend on such Note by:

 

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(1)                                 providing written notice to the Trustee and the Registrar that the Resale Restriction Termination Date has occurred and instructing the Trustee to remove the Restricted Notes Legend from such Global Notes;

 

(2)                                 providing written notice to each Holder of such Global Notes, which notice will state that the Restricted Notes Legend has been removed from the applicable Global Note and include the unrestricted CUSIP that will thereafter apply to such applicable Global Note;

 

(3)                                 providing written notice to the Trustee and the Depositary that the CUSIP number for each such Global Note will be changed to an unrestricted CUSIP number, which unrestricted CUSIP number will be listed in such notice; and

 

(4)                                 complying with any Applicable Procedures for legend removal.

 

(f)                                   General. By its acceptance of any Note bearing the Restricted Notes Legend, each Holder of such a Note acknowledges the applicable restrictions on transfer of such Note set forth in this Indenture and in the Restricted Notes Legend and agrees that it shall transfer such Note only as provided herein and therein.

 

SECTION 2.15 Issuance of Additional Notes.

 

The Issuer shall be entitled to issue Additional Notes under this Indenture that shall have identical terms as the Initial Notes, other than with respect to the date of issuance, issue price, accreted value, CUSIP or ISIN numbers, first interest payment date and amount of interest payable on the first interest payment date applicable thereto, as applicable; provided that such issuance is not otherwise prohibited by the terms of this Indenture, including Section 4.9 and Section 4.12. All Notes issued under this Indenture (including Additional Notes) shall be treated as a single class for all purposes under this Indenture including for purposes of any vote, consent, waiver or other act of Holders; provided, however, that if any such Additional Notes are not fungible with other Notes issued hereunder for federal income tax purposes, then such additional Notes shall have a separate CUSIP number.

 

With respect to any Additional Notes, the Issuer shall set forth in an Officer’s Certificate, a copy of which shall be delivered to the Trustee, the following information:

 

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

 

(2)                                 the issue price, the issue date, the CUSIP number of such Additional Notes, the first interest payment date and the amount of interest payable on such first interest payment date applicable thereto and the date from which interest shall accrue.

 

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Article III

 

REDEMPTION AND PREPAYMENT

 

SECTION 3.1 Notices to Trustee.

 

If the Issuer elects to redeem Notes pursuant to Section 3.7, it shall furnish to the Trustee, at least 15 days but not more than 60 days (or such shorter period as is acceptable to the Trustee) before a date fixed for redemption (the “redemption date”), an Officer’s Certificate setting forth (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the Redemption Price.

 

SECTION 3.2 Selection of Notes to Be Redeemed.

 

If less than all of the Notes are to be redeemed at any time pursuant to Section 3.7, the Trustee will select the Notes (or portions thereof) on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate (subject to the Depositary’s procedures as applicable); provided that no Notes of $2,000 principal amount or less will be redeemed in part. The Trustee shall make the selection from the Notes outstanding and not previously called for redemption and shall promptly notify the Issuer in writing of the Notes selected for redemption. The Trustee may select for redemption portions (equal to $2,000 or integral multiples of $1,000 in excess thereof (or if a PIK Payment has been made, in denominations of $1.00 and any integral multiple of $1.00 in excess thereof with respect to a PIK Note or the portion of a Global Note constituting PIK Interest)) of Notes that have denominations larger than $2,000.

 

SECTION 3.3 Notice of Redemption.

 

At least 15 days but not more than 60 days before a redemption date, the Issuer shall mail or cause to be mailed by first class mail (or, deliver electronically if held by DTC or in accordance with DTC’s applicable procedures), a notice of redemption to each Holder whose Notes are to be redeemed at its registered address and for the Notes registered in the name of the Depositary, in accordance with the Depositary’s applicable procedures.

 

The notice shall identify the Notes to be redeemed and shall state:

 

(1)                                 the redemption date;

 

(2)                                 the Redemption Price;

 

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

 

(4)                                 the name, telephone number and address of the Paying Agent;

 

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

 

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

 

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

 

(8)                                 that no representation is made as to the correctness or accuracy of the CUSIP and/or ISIN or other similar number, if any, listed in such notice or printed on the Notes.

 

At the Issuer’s written request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense; provided, however, that the Issuer shall have delivered to the Trustee at least 15 days prior to the redemption date (or such shorter period as is acceptable to the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in the notices as provided in the preceding paragraph. The notice sent in the manner herein provided shall be conclusively presumed to have been duly given whether or not a Holder receives such notice. In any case, failure to give such notice by mail (or electronically if held by DTC) or any defect in the notice to the Holder of any Note shall not affect the validity of the proceeding for the redemption of any other Note.

 

Notwithstanding any of the foregoing, notices of redemption may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a satisfaction and discharge of this Indenture.

 

SECTION 3.4 Effect of Notice of Redemption.

 

Once notice of redemption is mailed in accordance with Section 3.3, subject to any conditions, Notes called for redemption become irrevocably due and payable on the redemption date at the Redemption Price. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption, provided that the Issuer has delivered the requisite funds to the Trustee or the Paying Agent.

 

SECTION 3.5 Deposit of Redemption Price.

 

On or before 11:00 a.m. (New York City time) on each redemption date the Issuer shall deposit with the Trustee or with the Paying Agent (other than the Issuer or a Subsidiary thereof) money sufficient to pay the Redemption Price (including any applicable premium) of and accrued and unpaid interest, if any, for all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the Redemption Price (including any applicable premium) of, and accrued and unpaid interest, if any, on, all Notes to be redeemed.

 

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SECTION 3.6 Notes Redeemed in Part.

 

In the case of Certificated Notes, upon surrender and cancellation of a Note that is redeemed in part, the Issuer shall execute and, upon receipt of an Authentication Order, the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

 

SECTION 3.7 Optional Redemption; Repayment Premium at Maturity.

 

(a)                                 No Optional Redemption Prior to February 15, 2019.  The Notes shall not be redeemable at the option of the Issuer prior to February 15, 2019.

 

(b)                                 Optional Redemption on or After August 15, 2019. At any time and from time to time on and after August 15, 2019, the Issuer, at its option, may redeem the Notes, in whole or in part, upon not less than 15 nor more than 60 days’ prior written notice to Holders and not less than 20 days’ prior written notice to the Trustee (or such shorter timeline as the Trustee may agree), at the redemption prices (expressed as percentages of the principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest to but not including the applicable redemption date (subject to the right of Holders on the relevant record date to receive interest due on an interest payment date falling on or prior to the redemption date), if redeemed during the periods referred to below, beginning on August 15, 2019; provided, however, that if the Notes are being redeemed in part, such redemption will not reduce the aggregate principal amount of the Notes outstanding below $50,000,000 (together with any PIK Interest in respect thereof).

 

Periods following the Issue Date

 

Redemption Price

 

August 15, 2019 – February 14, 2020

 

102.000

%

February 15, 2020 – February 14, 2021

 

104.000

%

February 15, 2021 and thereafter

 

106.000

%

 

(c)                                  [Reserved].

 

(d)                                 Optional Redemption at Make-Whole Price.  From time to time during the period from February 15, 2019 through August 14, 2019, upon not less than 10 nor more than 60 days’ prior written notice to Holders and not less than 20 days’ prior written notice to the Trustee (or such shorter timeline as the Trustee may agree), the Issuer, at its option, may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes, plus the Applicable Premium as of, and accrued and unpaid interest to but not including the redemption date (subject to the right of Holders on the relevant record date to receive interest due on an interest payment date falling on or prior to the redemption date); provided, that if the Notes are being redeemed in part, such redemption will not reduce the aggregate principal amount of the Notes outstanding below $50,000,000 (together with any PIK Interest in respect thereof).

 

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(e)                                  [Reserved].

 

(f)                                   Notice of any redemption or any redemption in respect of the Notes may, at the Issuer’s discretion, be subject to one or more conditions precedent. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice of redemption shall describe each such condition, and if applicable, shall state that, in the Issuer’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied (or waived), or such redemption may not occur and such notice, upon written notice to the Trustee, may be rescinded in the event that any or all such conditions shall not have been satisfied (waived) by the redemption date as stated in such notice, or by the redemption date as so delayed; provided that in no event shall such redemption date be delayed to a date later than 60 days after the date on which the original redemption notice was sent. The Issuer shall provide notice to the Trustee at least one Business Day prior to the then scheduled redemption date of the delayed redemption date or the rescinding of the redemption notice. The Issuer may provide in such notice that payment of the redemption price and performance of the Issuer’s obligations with respect to such redemption may be performed by another Person.

 

(g)                                  Unless the Issuer defaults in the payment of the applicable redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

 

(h)                                 At maturity of the Notes, unless the Notes have previously been called for redemption in accordance with this Section 3.7, the Issuer will pay the Holders of the Notes a premium equal to 6.0% of the principal amount thereof.

 

SECTION 3.8 Offer to Purchase.

 

In the event that the Issuer shall be required to commence an Offer to Purchase pursuant to an Asset Sale Offer or a Change of Control Offer, the Issuer shall follow the procedures specified below.

 

On the Purchase Date, the Issuer shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary in the case of an Asset Sale Offer, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Offer to Purchase and not withdrawn; provided, however, that the authorized denominations of the Notes are maintained. All such Notes delivered in response of an Offer to Purchase shall be in $2,000 principal amounts or an integral multiple of $1,000 in excess thereof (or if a PIK Payment has been made, in denominations of $1.00 and any integral multiple of $1.00 in excess thereof with respect to a PIK Note or the portion of a Global Note constituting PIK Interest).

 

On the Purchase Date, the Issuer shall purchase the aggregate principal amount of Notes so accepted for payment (the “Offer Amount”). If the Purchase Date is on or after the interest record date and on or before the related interest payment date, accrued and unpaid interest, if any, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to the Holders who tender Notes pursuant to the Offer to Purchase.

 

On or before 11:00 a.m. (New York City time) on each Purchase Date, the Issuer shall deposit with the Trustee or Paying Agent (other than the Issuer or a Subsidiary thereof) the

 

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aggregate purchase price equal to the Offer Amount, together with accrued and unpaid interest, if any, for all the Notes accepted for payment (taking into account the provisions of the immediately preceding paragraph). The Trustee or the Paying Agent shall promptly, following such payment to Holders, return to the Issuer any money deposited with the Trustee or Paying Agent by the Issuer in excess of the amounts necessary to pay the Offer Amount together with accrued and unpaid interest, if any, on the Notes accepted for payment and not withdrawn (taking into account the provisions of the immediately preceding paragraph). The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than three (3) Business Days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Issuer for purchase, plus any accrued and unpaid interest, if any, on the Notes accepted for payment (taking into account the provisions of the immediately preceding paragraph), and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver at the expense of the Issuer such new Note to such Holder, equal in principal amount to any unpurchased portion of such Holder’s Notes surrendered; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof  (or if a PIK Payment has been made, in denominations of $1.00 and any integral multiple of $1.00 in excess thereof with respect to a PIK Note or the portion of a Global Note constituting PIK Interest). Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall publicly announce the results of the Offer to Purchase on or as soon as reasonably practicable after the Purchase Date.

 

Other than as specifically provided in this Section 3.8, any purchase pursuant to this Section 3.8 shall be made pursuant to the provisions of Sections 3.1 through 3.6 hereof.

 

SECTION 3.9 [Reserved]

 

SECTION 3.10 Mandatory Redemptions.

 

(a)                                 General.  Except as set forth in paragraph (b) below, the Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes; provided, however, that under certain circumstances, the Issuer may be required to offer to purchase the Notes described under Sections 4.10 and 4.14 hereof.  The Issuer may at any time and from time to time purchase the Notes in the open market or otherwise.

 

(b)                                 On the Issue Date, the Escrow Issuer will enter into the Escrow Agreement pursuant to which the Initial Purchasers and the Escrow Issuer (or one of the Escrow Issuer’s affiliates) will deposit the Escrow Property into the Escrow Account.  The Escrow Issuer will only be entitled to direct the Escrow Agent to release the Escrow Property in accordance with the terms of the Escrow Agreement.  In the event that (1) the Escrow Issuer shall have notified the Trustee and the Escrow Agent in writing that the ModSpace Acquisition will not be consummated on or prior to the Outside Date, (2) the Escrow Issuer shall have notified the Trustee and the Escrow Agent in writing that the Escrow Conditions will not be satisfied in full on or prior to the Outside Date, or (3) the Escrow Issuer shall have notified the Trustee and the Escrow Agent in writing that the ModSpace Acquisition will not be consummated or that the ModSpace Merger Agreement has been terminated (any such event, a “Special Mandatory Redemption Event”), the Escrow Agent or the Paying Agent shall release and deliver the

 

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Escrowed Funds to the Trustee not later than the third Business Day succeeding the date of any such notice (any such notice being referred to herein as “Special Redemption Notice”), and the Trustee or the Paying Agent will apply such Escrow Property to redeem all of the Notes (the “Special Mandatory Redemption”) at a price equal to 100.0% of the initial purchase price of such Note plus accrued and unpaid interest thereon to (but not including) the date fixed for such redemption (the “Special Mandatory Redemption Date”) as specified in the Special Redemption Notice, which date may be no later than three Business Days after the Outside Date.  Concurrently with the delivery of the Special Redemption Notice, the Escrow Issuer will instruct the Trustee to, at the Escrow Issuer’s expense, send (by first-class mail to each Holder’s registered address or otherwise in accordance with the procedures of DTC) a notice that a Special Mandatory Redemption will occur on the Special Mandatory Redemption Date. Upon the consummation of the ModSpace Acquisition, the foregoing provisions regarding the Special Mandatory Redemption will cease to apply.

 

Article IV

 

COVENANTS

 

SECTION 4.1 Payment of Notes.

 

The Issuer shall pay or cause to be paid through the Paying Agent the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid for all purposes hereunder on the date that (x) the Paying Agent, if other than the Issuer or a Subsidiary thereof, holds, as of 11:00 a.m. (New York City time), money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all such principal, premium, if any, and interest then due or (y) a PIK Payment is made in such amount (which shall be deemed to be paid on the date the Trustee has received (i) a written order from the Issuer signed by one Officer to increase the balance of any Global Note to reflect such PIK Payment or (ii) PIK Notes duly executed by the Issuer together with a written order of the Issuer signed by one Officer requesting the authentication of such PIK Notes by the Trustee). All funds provided to the Paying Agent must be in U.S. Dollars.

 

SECTION 4.2 Maintenance of Office or Agency.

 

The Issuer shall maintain an office or agency where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.

 

The Issuer may also from time to time designate one (1) or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

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SECTION 4.3 Reports.

 

Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, following the Escrow Release Date, the Issuer will provide the Trustee with such annual and quarterly reports and such information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such information, documents and reports to be so provided at the times specified for the filing of such information, documents and reports under such Sections.

 

Notwithstanding the foregoing, the Issuer will not be required to furnish any information required by Rule 3-05, 3-09 or 3-10 of Regulation S-X.

 

The financial statements, information and other documents required to be provided as described above may be those of (i) the Issuer or (ii) any direct or indirect parent of the Issuer; provided that, if the financial information so delivered relates to such direct or indirect parent of the Issuer, and such parent conducts, transacts or engages in any material business or operations other than its direct or indirect ownership of all of the Equity Interests in, and its management, of the Issuer, the same is accompanied by a reasonably detailed description of the quantitative differences between the information relating to such parent, on the one hand, and the information relating to the Issuer and its Restricted Subsidiaries on a standalone basis, on the other hand.

 

The Issuer will not be required to provide the Trustee with any such information, documents or reports that are filed with the SEC and the Trustee shall have no responsibility whatsoever to determine if such reports and information have been filed with the SEC or to monitor the Issuer’s filings.

 

Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its obligations hereunder for purposes of Section 6.1(5) until 120 days after the date any report hereunder is due.

 

Any such reports delivered or filed by the Issuer with the Trustee shall be considered for informational purposes only and the Trustee’s receipt of such reports shall not constitute notice or actual knowledge of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate).

 

SECTION 4.4 Compliance Certificate.

 

The Issuer shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officer’s Certificate stating, as to each such Officer signing such certificate, that, to his or her knowledge, each of the Issuer and the Guarantors is not in default as of the end of such fiscal year in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto) and that, to his or her knowledge, no event has occurred and remains in existence by reason of which payments on account of the principal of, premium,

 

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if any, or interest on the Notes is prohibited or if such event has occurred, a description of the event and what action the Issuer is taking or proposes to take with respect thereto.

 

The Issuer shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer of the Issuer becoming aware of any Default or Event of Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.

 

SECTION 4.5 Taxes.

 

The Issuer shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency all material taxes, assessments and governmental levies, except such as are contested in good faith and by appropriate negotiations and proceedings and with respect to which appropriate reserves have been taken in accordance with GAAP or where the failure to effect such payment is not adverse in any material respect to the Holders.

 

SECTION 4.6 Stay, Extension and Usury Laws.

 

The Issuer covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

 

SECTION 4.7 Limitation on Restricted Payments.

 

The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment unless, at the time of such Restricted Payment (it being agreed that only Restricted Payments under clause (d) of the definition thereof may be made pursuant to this paragraph):

 

(a)                                 no Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

 

(b)                                 after giving effect to such Restricted Payment on a Pro Forma Basis, the Issuer could Incur at least $1.00 of additional Debt (other than Permitted Debt) pursuant to the provisions described in the first paragraph under Section 4.9; and

 

(c)                                  such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (ii) through (xii) and (xiv) through (xvi) of the next succeeding paragraph), shall not exceed the sum (without duplication) of:

 

(1)                                 50% of the Consolidated Net Income (or, if Consolidated Net Income shall be a deficit, minus 100% of such deficit) of the Issuer accrued on a cumulative basis

 

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during the period (taken as one accounting period) from and including the first day of the fiscal quarter during which the Issue Date occurred and ending on the last day of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, plus

 

(2)                                 100% of the aggregate net proceeds (including the Fair Market Value of property other than cash) received by the Issuer subsequent to the Issue Date either (i) as a contribution to its common equity capital or (ii) from the issuance or sale (other than to a Restricted Subsidiary) of its Equity Interests (other than Disqualified Stock); provided that this shall apply only to the extent such net proceeds have not been used to make any Restricted Payments pursuant to clauses (ii) and (iii)(y) of the next succeeding paragraph, plus

 

(3)                                 the amount equal to the sum of (x) the net reduction in Investments (other than Permitted Investments) made by the Issuer or any Restricted Subsidiary, subsequent to the Issue Date, in any Person, resulting from payments of interest on Debt, dividends, repayments of loans or advances, repurchases, repayments or redemptions of such Investments by such Person; proceeds (including the Fair Market Value of property other than cash) representing the return of capital; and proceeds (including the Fair Market Value of property other than cash) received upon the sale or other disposition of such Investments and (y) in the event that any Unrestricted Subsidiary is redesignated as a Restricted Subsidiary, the portion (proportionate to the Issuer’s or any Restricted Subsidiary’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is re-designated as a Restricted Subsidiary; provided, however, that the foregoing sum will not exceed, in the case of any such Person, the amount of Investments (other than Permitted Investments) previously made (and treated as a Restricted Payment) by the Issuer or any Restricted Subsidiary in such Person or Unrestricted Subsidiary, plus

 

(4)                                 the amount by which Debt of the Issuer and its Restricted Subsidiaries is reduced on the Issuer’s balance sheet upon the conversion into or exchange (other than by a Restricted Subsidiary of the Issuer) subsequent to the Issue Date for Equity Interests (other than Disqualified Stock) of the Issuer or any of its Restricted Subsidiaries (less the amount of any cash, or the Fair Market Value of any other property, distributed by the Issuer or any of its Restricted Subsidiaries (other than to the Issuer or any of its Restricted Subsidiaries) upon such conversion or exchange).

 

Notwithstanding the foregoing provisions, the Issuer and its Restricted Subsidiaries may take the following actions:

 

(i)                                     the payment of any dividend or distribution or the consummation of any redemption within 60 days after the date of declaration of the dividend or distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend, distribution or redemption payment would have complied with the provisions of this Indenture;

 

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(ii)                                  any Restricted Payment made in exchange for, or with the net proceeds from, the substantially concurrent issuance or sale (other than to a Restricted Subsidiary of the Issuer) of Equity Interests (other than Disqualified Stock) of the Issuer or a substantially concurrent equity contribution received by the Issuer or such Restricted Subsidiary;

 

(iii)                               the making of any payment (including a sinking fund payment) on or with respect to, or the purchase, repurchase, redemption, defeasance, acquisition or retirement for value of any Debt or Disqualified Stock of the Issuer or any of its Restricted Subsidiaries that is subordinate in right of payment to the Notes or to any Note Guarantee (A) with, in exchange for, or with the net proceeds from (x) an Incurrence of new Debt of the Issuer or any of its Restricted Subsidiaries, as the case may be, Incurred in accordance with this Indenture or (y) an issuance or sale of Equity Interests (other than Disqualified Stock) of the Issuer (or any direct or indirect parent of the Issuer), and/or any capital contribution in respect of such Equity Interests, and (B) as a result of the conversion of all or any portion of such Debt or Disqualified Stock into Equity Interests of the Issuer (or any direct or indirect parent of the Issuer) (other than Disqualified Stock of the Issuer);

 

(iv)                              the purchase, repurchase, redemption, retirement or other acquisition for value of Equity Interests in the Issuer or any direct or indirect parent of the Issuer held by current or former officers, directors, employees or consultants (or their respective permitted transferees, estates or beneficiaries under their estates) of any such parent, the Issuer or any of its Restricted Subsidiaries; provided that the aggregate consideration paid for such purchase, repurchase, redemption, retirement or other acquisition for value of such Equity Interests made pursuant to this clause (iv) may not exceed $10.0 million (plus the amount of net cash proceeds received by the Issuer and its Restricted Subsidiaries in respect of “key-man” life insurance during such period);

 

(v)                                 repurchases of Equity Interests deemed to occur upon the exercise of stock options, warrants or other convertible or exchangeable securities to the extent such Equity Interests represent all or a portion of the exercise price of those stock options, warrants or other convertible or exchangeable securities or all or a portion of any taxes required to be withheld in connection with such exercise;

 

(vi)                              the prepayment of Debt owed by the Issuer or any of its Restricted Subsidiaries to the Issuer or any of its Restricted Subsidiaries, the Incurrence of which was permitted pursuant to Section 4.9;

 

(vii)                           [reserved];

 

(viii)                        the declaration of any dividend or distribution by any of the Issuer’s Restricted Subsidiaries to the holders of its Equity Interests on a pro rata basis;

 

(ix)                              upon the occurrence of (i) a Change of Control and after the completion of the Offer to Purchase pursuant to Section 4.14 or (ii) an Asset Sale to the extent that an Offer to Purchase is required to be made in accordance with this Indenture and after the

 

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completion of the Offer to Purchase pursuant to Section 4.10 (including, in each case, the purchase of all Notes validly tendered (and not withdrawn), any purchase, defeasance, retirement, redemption or other acquisition of Debt that is contractually subordinated in right of payment to the Notes or any Note Guarantee required under the terms of such Debt as a result of such Change of Control or Asset Sale, as applicable;

 

(x)                                 [reserved];

 

(xi)                              Restricted Payments to a direct or indirect parent of the Issuer in amounts sufficient to permit such parent to pay (or to make a dividend to permit any direct or indirect parent to pay):

 

(A)                               income tax obligations in each relevant jurisdiction, for so long as the Issuer or such Restricted Subsidiary is a member of the group filing a consolidated, combined, unitary, affiliated or other similar tax return with such parent, and only to the extent that such tax liability is directly attributable to the taxable income of the Issuer or such Restricted Subsidiary (that are included in such consolidated, combined, unitary, affiliated or other similar tax return), determined as if the Issuer or such Restricted Subsidiary filed a separate consolidated, combined, unitary, affiliated or other similar tax return as a stand-alone group and will be used to pay (or to make distributions to allow any direct or indirect parent to pay), promptly, and in any event within forty-five (45) days of the receipt thereof, the tax liability in each relevant jurisdiction in respect of such consolidated, combined, unitary, affiliated or other similar returns;

 

(B)                               franchise taxes and other fees, taxes and expenses required to maintain such parent’s corporate existence; and

 

(C)                               (i) operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses provided by third parties), plus any reasonable and customary indemnification claims made by directors or officers of the Issuer (or any parent thereof) attributable to the ownership or operations of the Issuer and its Subsidiaries or (ii) fees and expenses otherwise (1) due and payable by the Issuer or any of its Subsidiaries and (2) permitted to be paid by the Issuer or such Subsidiary under this Indenture;

 

(xii)                           [reserved];

 

(xiii)                        [reserved];

 

(xiv)                       Restricted Payments, the proceeds of which are applied on the Escrow Release Date solely to effect the consummation of the Transactions;

 

(xv)                          [reserved]; and

 

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(xvi)                       other Restricted Payments not in excess of an aggregate amount equal to the greater of (a) $30,000,000 and (b) 1.1% of Consolidated Total Assets as of the last date of the most recently-ended Four-Quarter Period.

 

For purposes of this Section 4.7, if any Investment or Restricted Payment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of “Permitted Investments,” the Issuer may classify all or any portion of such Investment or Restricted Payment in any manner that complies with this Section 4.7 and may later reclassify from time to time all or any portion of such Investment or Restricted Payment so long as the Investment or Restricted Payment (as so reclassified) would be permitted to be made in reliance on the applicable exception as of the date of such reclassification.

 

If any Person in which an Investment is made, which Investment constitutes a Restricted Payment when made, thereafter becomes a Restricted Subsidiary in accordance with this Indenture, all such Investments previously made in such Person shall no longer be counted as Restricted Payments for purposes of calculating the aggregate amount of Restricted Payments pursuant to clause (c) of the first paragraph under this Section 4.7, in each case to the extent such Investments would otherwise be so counted.

 

For purposes of this Section 4.7, if a particular Restricted Payment involves a non-cash payment, including a distribution of assets or securities, then such Restricted Payment shall be deemed to be an amount equal to the cash portion of such Restricted Payment, if any, plus an amount equal to the Fair Market Value of the non-cash portion of such Restricted Payment, and the Fair Market Value of any such non-cash portion shall be determined conclusively by the Board of Directors of the Issuer acting in good faith.

 

SECTION 4.8 Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

The Issuer shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

 

(i)                                     pay dividends or make any other distributions to the Issuer or any Restricted Subsidiary with respect to its Capital Stock or any other interest or participation in, or measured by, its profits or pay any Debt owed to the Issuer or any Restricted Subsidiary (it being understood that the priority of any preferred stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and the subordination of loans or advances made to the Issuer or any of its Restricted Subsidiaries to other Debt Incurred by the Issuer or any of its Restricted Subsidiaries shall not be deemed a restriction on the ability to pay any Debt or other Obligations);

 

(ii)                                  make any loans or advances to the Issuer or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Issuer or any of

 

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its Restricted Subsidiaries to other Debt Incurred by the Issuer or any of its Restricted Subsidiaries shall not be deemed a restriction on the ability to make loans or advances); or

 

(iii)                               sell, lease or transfer any of its property or assets to the Issuer or any Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (i) or (ii) above).

 

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

 

(a)                                 agreements or instruments in effect or entered into on the Issue Date, including agreements or instruments governing Debt outstanding on the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions are not materially more restrictive, taken as a whole, as determined in good faith by the Issuer, with respect to such dividend and other payment restrictions than those contained in the agreements or instruments governing such Debt on the Issue Date;

 

(b)                                 an agreement relating to an acquisition of property, so long as the encumbrances or restrictions in any such agreement relate solely to the property so acquired (and are not or were not created solely in contemplation of or in connection with the acquisition thereof) and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions are not materially more restrictive, taken as a whole, as determined in good faith by the Issuer, with respect to such dividend and other payment restrictions than those contained in the agreement prior to such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions;

 

(c)                                  any agreement or other instrument of a Person acquired by the Issuer or any of its Restricted Subsidiaries in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions are not materially more restrictive, taken as a whole, as determined in good faith by the Issuer, with respect to such dividend and other payment restrictions than those contained in such agreements or other instruments prior to such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions;

 

(d)                                 customary provisions restricting subletting or assignment of any property or asset that is subject to any lease, contract, or license of the Issuer or any of its Restricted Subsidiaries

 

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or provisions in agreements that restrict the assignment or transfer of such agreement or any rights thereunder;

 

(e)                                  applicable law, rule, regulation, order, approval, license, permit or similar restriction;

 

(f)                                   any restriction on the sale or other disposition of assets or property securing Debt as a result of a Permitted Lien on such assets or property;

 

(g)                                  the Note Documents, the ABL Credit Facility and the other Loan Documents (as defined in the ABL Credit Facility, as in effect on the Escrow Release Date), the 2017 Senior Secured Notes Indenture and the other Note Documents (as defined in the 2017 Senior Secured Notes Indenture, as in effect on the Escrow Release Date), the 2018 Senior Secured Notes Indenture and the other Note Documents (as defined in the 2018 Senior Secured Notes Indenture, as in effect on the Escrow Release Date), and in each case any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or extensions are not materially more restrictive, taken as a whole, as determined in good faith by the Issuer, with respect to such dividend and other payment restrictions than those contained in the Note Documents, the ABL Credit Facility and the other Loan Documents (as defined in the ABL Credit Facility), the 2017 Senior Secured Notes Indenture and the other Note Documents (as defined in the 2017 Senior Secured Notes Indenture), and the 2018 Senior Secured Notes Indenture and the other Note Documents (as defined in the 2018 Senior Secured Notes Indenture), as the case may be, on the Escrow Release Date;

 

(h)                                 restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(i)                                     customary provisions limiting the disposition or distribution of assets or property in partnership agreements, limited liability company organizational materials, stockholder agreements, joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements, which limitation is applicable only to the assets (including Equity Interests of Subsidiaries) that are the subject of such agreements;

 

(j)                                    Liens permitted to be incurred under this Indenture, including under Section 4.12, that limit the right of the Issuer or any of its Restricted Subsidiaries to sell or dispose of the property or assets subject to such Liens;

 

(k)                                 any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition;

 

(l)                                     customary arrangements entered into or incurred by and relating exclusively to a Receivables Subsidiary in connection with a Qualified Receivables Transaction that, in the good faith determination of the Issuer is reasonably necessary to effect such Qualified Receivables Transaction;

 

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(m)                             (i) purchase money obligations for property acquired in the ordinary course of business and (ii) Capital Lease Obligations permitted under this Indenture that impose restrictions on the property purchased or leased of the nature described in clause (iii) of the preceding paragraph of this Section 4.8;

 

(n)                                 restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Issuer or any Restricted Subsidiary a party entered into in the ordinary course of business;

 

(o)                                 those arising in connection with any Hedging Obligations and/or Bank Product Obligations; and

 

(p)                                 other Debt of the Issuer or any of its Restricted Subsidiaries permitted to be Incurred subsequent to the Issue Date pursuant to Section 4.9; provided that the restrictions contained therein are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in this Indenture or would not materially adversely affect the Issuer’s ability to make anticipated principal and interest payments on the Notes, in each case, as determined in good faith by the Issuer.

 

Nothing contained in this Section 4.8 shall prevent the Issuer or any of its Restricted Subsidiaries from creating, incurring or suffering to exist any Permitted Lien.

 

SECTION 4.9 Limitation on Incurrence of Debt.

 

The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, Incur any Debt (including Acquired Debt); provided, however, that the Issuer and any Guarantor may Incur Debt (including Acquired Debt) if, the Issuer’s Consolidated Total Net Leverage Ratio for the most recently ended Four-Quarter Period for which internal financial statements are available on or immediately preceding the date on which such additional Debt is Incurred, would have been no greater than 5.25 to 1.00, calculated on a Pro Forma Basis (including a pro forma application of the net proceeds therefrom).

 

Notwithstanding the first paragraph of this Section 4.9, the Issuer and its Restricted Subsidiaries may Incur Permitted Debt.

 

For purposes of determining compliance with this Section 4.9, (x) Guarantees or obligations with respect to letters of credit supporting Debt otherwise included in the determination of the amount of Debt shall not be included and (y) in the event that an item of Debt meets the criteria of more than one of the categories of Permitted Debt and/or would have been permitted to have been Incurred pursuant to the first paragraph of this Section 4.9, the Issuer, in its sole discretion, may classify, and from time to time may reclassify, all or any portion of such item of Debt as being within one or more of such categories or as being Debt permitted to be Incurred pursuant to the first paragraph of this Section 4.9; provided that all Debt outstanding (x) under the ABL Credit Facility on the Escrow Release Date shall be treated as incurred on the Escrow Release Date under clause (i) of the definition of “Permitted Debt” and (y) in respect of the 2018 Senior Secured Notes on the Escrow Release Date shall be treated as incurred on the Escrow Release Date under clause (xxvii) of the definition of “Permitted Debt”.  Debt permitted by this Section 4.9 need not be permitted solely by reference to one provision

 

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permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.9 permitting such Debt.

 

The accrual of interest and dividends, the accretion of accreted value, the accretion or amortization of original issue discount, the payment of interest on any Debt in the form of additional Debt (including any PIK Payment), the payment of dividends on Equity Interests in the forms of additional shares of Equity Interests with the same terms, and changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder will not be deemed to be an Incurrence of Debt.

 

For purposes of determining compliance with any U.S. Dollar-denominated restriction on the Incurrence of Debt, the U.S. Dollar-equivalent principal amount of Debt denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Debt was Incurred, in the case of term Debt, or first committed, in the case of revolving credit Debt; provided that if such Debt is Incurred to refinance other Debt denominated in a foreign currency, and such refinancing would cause the applicable U.S. Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Debt does not exceed the principal amount of such Debt being refinanced (plus interest or premiums, defeasance costs, underwriting discounts and fees and expenses incurred in connection therewith). Notwithstanding any other provision of this Section 4.9, any increase in the U.S. Dollar equivalent of outstanding Debt of the Issuer or any of its Restricted Subsidiaries denominated in a currency other than U.S. Dollars resulting from fluctuations in the exchange values of currencies will not be considered to be an Incurrence of Debt for purposes of this Section 4.9; provided that the amount of Debt of the Issuer and its Restricted Subsidiaries outstanding at any time for purposes of covenant compliance will be the U.S. Dollar equivalent of all such Debt of the Issuer and its Restricted Subsidiaries outstanding at such time.

 

In the event an item of Debt (or any portion thereof) is Incurred as Permitted Debt on the same date that an item of Debt is Incurred under the first paragraph of this Section 4.9, then the Consolidated Total Net Leverage Ratio will be calculated with respect to such Incurrence under the first paragraph of this Section 4.9 without regard to any Incurrence of such Permitted Debt. Unless the Issuer elects otherwise, the Incurrence of Debt will be deemed Incurred first under the first paragraph of this Section 4.9 to the extent permitted, with the balance Incurred as Permitted Debt.

 

The Issuer will not, and will not permit any Guarantor to Incur, any Debt that pursuant to its terms is subordinate or junior in right of payment to any other Debt of the Issuer or such Guarantor, unless such Debt is also subordinated in right of payment to the Notes or the Note Guarantee of such Guarantor, as the case may be, on substantially identical terms; provided that Debt will not be considered subordinate or junior in right of payment to any other Debt solely by virtue of being unsecured or by virtue of being secured on a junior lien or priority basis.

 

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SECTION 4.10 Limitation on Asset Sales.

 

The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(1)                                 The Issuer or the Restricted Subsidiary, as the case may be, receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and

 

(2)                                 at least 75% of the consideration received by the Issuer or such Restricted Subsidiary, as the case may be, in such Asset Sale is in the form of cash, Cash Equivalents or Replacement Assets.

 

For purposes of this provision, each of the following will be deemed to be cash:

 

(a)                                 any liabilities (as shown on the most recent consolidated balance sheet of the Issuer (or any direct or indirect parent of the Issuer) or in the notes thereto or, if incurred, increased, or decreased subsequent to the date of such balance sheet, such liabilities that would have been reflected on such balance sheet or in the notes thereto if such incurrence, increase or decrease had taken place on the date of such balance sheet, as reasonably determined in good faith by the Issuer) of the Issuer or a Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee (or a third party on behalf of the transferee) of any such assets pursuant to an agreement that releases or indemnifies the Issuer or such Restricted Subsidiary (or a third party on behalf of the transferee), as the case may be, from further liability;

 

(b)                                 any Designated Non-cash Consideration received by the Issuer or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (b), less the amount of cash or Cash Equivalents received in connection with a subsequent sale, redemption or payment of, or collected on or with respect to any such Designated Non-cash Consideration, not to exceed 5.0% of Consolidated Total Assets at the time of receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); and

 

(c)                                  any securities, notes or other obligations or assets received by the Issuer or any such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash or Cash Equivalents within 180 days of their receipt to the extent of the cash or Cash Equivalents received in that conversion;

 

Within 365 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Issuer or the applicable Restricted Subsidiary, as the case may be, may apply (or cause to be applied) such Net Cash Proceeds at its option:

 

(1)                                 to repay any Debt (x) that is secured by the assets of the Issuer or any Restricted Subsidiary that is a Guarantor or (y) of a Restricted Subsidiary that is not a Guarantor;

 

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(2)                                 to prepay, repay or purchase (or offer to prepay, repay or purchase, as applicable) the Notes and any Pari Passu Debt on a pro rata basis; provided that any repayment, prepayment or purchase of (or offer to repay, prepay or purchase) obligations under the Notes shall be made (x) as provided in Section 3.7, (y) through open-market purchases (to the extent such purchases are at or above 100% of the principal amount of the Notes purchased, plus accrued and unpaid interest to but excluding the date of purchase) or (z) by making an Offer to Purchase (in accordance with the procedures set forth below with respect to Excess Proceeds) to all holders of Notes to purchase their Notes (at a purchase price of 100% of the principal amount of the Notes purchased, plus accrued and unpaid interest to but excluding the date of purchase);

 

(3)                                 to make capital expenditures or expenditures for maintenance, repair or improvement of existing properties and assets;

 

(4)                                 to acquire Replacement Assets; or

 

(5)                                 any combination of the foregoing;

 

or enter into a binding commitment regarding clauses (3) or (4) above; provided that such binding commitment shall be treated as a permitted application of Net Cash Proceeds from the date of such commitment until the earlier of (x) the date on which such acquisition or expenditure is consummated and (y) the 180th day following the expiration of the aforementioned 365 day period. If such acquisition or expenditure is not consummated on or before such 180th day and the Issuer or such Restricted Subsidiary shall not have applied such Net Cash Proceeds pursuant to clauses (1) through (5) of this paragraph on or before such 180th day, such commitment shall be deemed not to have been a permitted application of Net Cash Proceeds on such 180th day.

 

Pending the final application of any such Net Cash Proceeds, the Issuer or a Restricted Subsidiary may temporarily reduce Debt under Credit Facilities or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by this Indenture.

 

Any Net Cash Proceeds from Asset Sales that are not applied or invested as provided in the third paragraph of this Section 4.10 will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $25.0 million, within thirty days thereof, the Issuer will make an Offer to Purchase to all Holders and all holders of Pari Passu Debt containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets, in each case, equal to the maximum principal amount of Notes and such other Pari Passu Debt that may be purchased out of the Excess Proceeds. The offer price in any such Offer to Purchase will be equal to 100% of the principal amount of the Notes purchased, plus accrued and unpaid interest to but excluding the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of such an Offer to Purchase, the Issuer may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture and such remaining amount shall not be added to any subsequent Excess Proceeds for any purpose under this Indenture. If the aggregate principal amount of Notes and such other Pari Passu Debt tendered into such Offer to Purchase exceeds the amount of Excess Proceeds, the Trustee will select the Notes and the Issuer will select such other Pari Passu Debt to be

 

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purchased on a pro rata basis as between the Notes and Pari Passu Debt. Upon completion of each Offer to Purchase, the amount of Excess Proceeds will be reset at zero. Any such Offer to Purchase will be conducted in accordance with the procedures specified in Section 3.8.

 

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

 

The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Offer to Purchase. To the extent that the provisions of any securities laws or regulations conflict with Section 3.8 or this Section 4.10, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.8 or this Section 4.10 by virtue of such compliance.

 

SECTION 4.11 Limitation on Transactions with Affiliates.

 

The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from in any transaction or series of related transactions, or enter into or make or amend, any contract, agreement, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $10.0 million, unless:

 

(i)                                     such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could reasonably have been obtained in a comparable arm’s-length transaction by the Issuer or such Restricted Subsidiary with an unaffiliated third party; and

 

(ii)                                  with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25.0 million, the Issuer delivers to the Trustee a resolution adopted by the Board of Directors of the Issuer approving such Affiliate Transaction and an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (i) above.

 

The foregoing limitation does not limit, and shall not apply to:

 

(i)                                     Permitted Investments and/or other Restricted Payments that are permitted by Section 4.7;

 

(ii)                                  the payment of any fees or expenses incurred or paid by the Issuer and any Restricted Subsidiary in connection with the Transactions;

 

(iii)                               any employment or consulting agreement, director’s engagement agreement, employee benefit plan, officer or director indemnification agreement, severance arrangement, compensation or any similar arrangement entered into by the

 

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Issuer (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries in the ordinary course of business or approved in good faith by the relevant Board of Directors and payments pursuant thereto;

 

(iv)                              the payment of reasonable fees, reasonable out of pocket costs, compensation and other benefits (including retirement, health, stock, option, deferred compensation and other benefit plans), reimbursements and indemnities paid to, or provided on behalf of, or for the benefit of, former, current or future directors, officers, employees, managers and consultants of any direct or indirect parent of the Issuer, the Issuer or any of its Restricted Subsidiaries to the extent attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries;

 

(v)                                 payments to any future, current or former employee, director, officer or consultant of Issuer (any direct or indirect parent thereof) or any of its Subsidiaries pursuant to a management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any health, disability and similar insurance or benefit plans or supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers or consultants that are, in each case, approved by the Issuer in good faith;

 

(vi)                              transactions between or among the Issuer and one or more of its Restricted Subsidiaries (including any Person that becomes a Restricted Subsidiary in connection with such transaction) or between or among one or more Restricted Subsidiaries (including any Person that becomes a Restricted Subsidiary in connection with such transaction);

 

(vii)                           any transaction with a Person which would constitute an Affiliate Transaction solely because the Issuer or a Restricted Subsidiary owns, directly or indirectly, Equity Interests of or otherwise controls such Person

 

(viii)                        the issuance or sale of Capital Stock or other Equity Interests of any direct or indirect parent of the Issuer to the management of the Issuer, any of its Restricted Subsidiaries (or any direct or indirect parent thereof), or any of their respective subsidiaries pursuant to employee and severance arrangements in the ordinary course of business, or to any director, officer, employee or consultant (or their respective estates, investment funds, investment vehicles, spouses or former spouses) of the Issuer, any of the Issuer’s subsidiaries or any direct or indirect parent of the Issuer and the granting and performing of reasonable and customary registration rights;

 

(ix)                              any agreement, instrument or arrangement as in effect on the Escrow Release Date, and any transactions contemplated thereby and amendments or modifications thereto or replacements thereof, so long as any such amendment, modification or replacement is not disadvantageous in any material respect to the Holders, taken as a whole, as compared to the original agreement, instrument or arrangement in effect on the Escrow Release Date;

 

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(x)                                 transactions as to which the Issuer or any Restricted Subsidiary delivers to the Trustee a written opinion of an investment banking, accounting, consulting or appraisal firm of national standing in the United States to the effect that the transaction complies with clause (i) above or is fair, from a financial point of view or otherwise, to the Issuer or the Restricted Subsidiary that is a party thereto, as the case may be;

 

(xi)                              any contribution of capital to the Issuer or any Restricted Subsidiary otherwise permitted hereunder;

 

(xii)                           transactions with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods or services, in each case, in the ordinary course of business or consistent in all material respects with past practice and which are (x) in the good faith determination of the Issuer (including by senior management or the board thereof), fair to the Issuer and its Restricted Subsidiaries or (y) on terms that are not less favorable, taken as a whole, to the Issuer or such Restricted Subsidiary, than those that might reasonably have been obtained in a comparable arm’s-length transaction with an unaffiliated third party;

 

(xiii)                        sales or other dispositions of accounts receivable and related assets and interests therein of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Subsidiary in a Qualified Receivables Transaction and Permitted Investments and other transactions in connection with a Qualified Receivables Transaction and any other Standard Securitization Undertakings in connection with a Qualified Receivables Transaction;

 

(xiv)                       the entering into of a tax sharing agreement, or payments pursuant thereto, between the Issuer and one or more Restricted Subsidiaries, on the one hand, and any other Person (including any direct or indirect parent of the Issuer) with which the Issuer and/or such Restricted Subsidiaries files a consolidated tax return; provided that any such tax sharing agreement, or payment pursuant thereto, shall be on customary terms to the extent attributable to the ownership or operation of the Issuer and the relevant Restricted Subsidiaries;

 

(xv)                          any merger, amalgamation, arrangement, consolidation or other reorganization of the Issuer with an Affiliate solely for the purpose and with the sole effect of forming a holding company or reincorporating the Issuer in a new jurisdiction;

 

(xvi)                       transactions between the Issuer or any of its Restricted Subsidiaries and any Person that is an Affiliate solely because one or more of its directors is also a director of the Issuer or any of its Restricted Subsidiaries; provided that such director abstains from voting as a director of the Issuer or such Restricted Subsidiary, as the case may be, on any matter involving such other Person;

 

(xvii)                    any issuance or sale of Capital Stock (other than Disqualified Stock) to Affiliates of the Issuer and any agreement that grants registration and other customary rights in connection therewith or otherwise to the direct or indirect securityholders of the Issuer (and the performance of such agreements);

 

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(xviii)                 (A) investments by Affiliates (other than any direct or indirect parent of the Issuer or any such parent’s subsidiaries) in securities of the Issuer or any of the Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred in connection therewith) so long as (x) the investment is being offered generally to investors on the same or more favorable terms and (y) the investment constitutes less than 10.0% of the proposed issue amount of such class of securities, and (B) transactions with Affiliates solely in their capacity as holders of Debt or Equity Interests of the Issuer or any of the Restricted Subsidiaries, so long as such transaction is with all holders of such class (and there are such non-Affiliate holders) and such Affiliates are treated no more favorably than all other holders of such class generally;

 

(xix)                       any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by, merged into or amalgamated, arranged or consolidated with the Issuer or any of its Restricted Subsidiaries; provided that such agreement was not entered into in contemplation of such acquisition, merger, amalgamation, arrangement or consolidation and any amendment thereto (so long as any such amendment is not materially more disadvantageous to the Issuer or such Restricted Subsidiary in the good faith judgment of Senior Management or the Board of Directors of the Issuer, when taken as a whole, as compared to the applicable agreement as in effect on the date of such acquisition, merger, amalgamation, arrangement or consolidation);

 

(xx)                          any lease entered into between the Issuer or any Restricted Subsidiary, as lessee, and any Affiliate of the Issuer, as lessor, in the ordinary course of business, and any lease, sublease, license or sublicense of intellectual property in the ordinary course of business;

 

(xxi)                       pledges of Equity Interests of Unrestricted Subsidiaries to support the Debt of any such Unrestricted Subsidiary; and

 

(xxii)                    payments to and from and transactions with any joint venture in the ordinary course of business; provided that such joint venture is not controlled by an Affiliate (other than a Restricted Subsidiary) of the Issuer.

 

SECTION 4.12 Limitation on Liens.

 

The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur or assume any Lien of any kind securing Debt except Permitted Liens, unless the Notes are equally and ratably secured with the obligations so secured or until such time as such obligations are no longer secured by a Lien.

 

For purposes of determining compliance with this Section 4.12, in the event that a proposed Lien (or a portion thereof) meets the criteria of more than one of the categories described in one or more of the clauses contained in the definition of “Permitted Liens,” the Issuer will be entitled to divide or classify (or later divide, classify or reclassify in whole or in part in its sole discretion) such Lien (or any portion thereof) among one or more clauses contained in the definition of “Permitted Liens” in a manner that otherwise complies with this Section 4.12.

 

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SECTION 4.13 Limitation on Sale and Leaseback Transactions.

 

The Issuer shall not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction unless:

 

(i)                                     the consideration received in such Sale and Leaseback Transaction is at least equal to the Fair Market Value of the property that is the subject of such Sale and Leaseback Transaction, and in the case of any Sale and Leaseback Transaction with a Fair Market Value equal to or greater than $10.0 million, such Fair Market Value is certified to the Trustee in an Officer’s Certificate;

 

(ii)                                  the Issuer or the Restricted Subsidiary could have incurred an aggregate amount of such Debt in an amount equal to the Attributable Debt relating to such Sale and Leaseback Transaction under Section 4.9; and

 

(iii)                               if such Sale and Leaseback Transaction constitutes an Asset Sale, the transfer of assets in such Sale and Leaseback Transaction is permitted by, and the Issuer or such Restricted Subsidiary, as the case may be, applies the Net Cash Proceeds of such transaction in compliance with Section 4.10.

 

SECTION 4.14 Offer to Purchase upon a Change of Control.

 

Upon the occurrence of a Change of Control, the Issuer will be required to make an Offer to Purchase (a “Change of Control Offer”) all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof (or if a PIK Payment has been made, in denominations of $1.00 and any integral multiple of $1.00 in excess thereof with respect to a PIK Note or the portion of a Global Note constituting PIK Interest)) of each Holder’s Notes at a purchase price (the “Purchase Price”) in cash equal to 101% of the principal amount of the Notes tendered, plus accrued and unpaid interest to but not including the Purchase Date (subject to the right of Holders on the relevant record date to receive interest due on an interest payment date falling on or prior to the Purchase Date). For purposes of the foregoing, a Change of Control Offer shall be deemed to have been made if (i) within 30 days following a Change of Control, the Issuer commences an Offer to Purchase all outstanding Notes at the Purchase Price and (ii) all Notes validly tendered (and not withdrawn) pursuant to the Offer to Purchase are purchased in accordance with the terms of such Offer to Purchase. Any Change of Control Offer will be conducted in accordance with the procedures specified in Section 3.8.

 

The Issuer will not be required to make a Change of Control Offer if (i) a third party makes such Offer to Purchase in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered (and not withdrawn) under such Change of Control Offer or (ii) a notice of redemption for all of the outstanding Notes has been given pursuant to Section 3.7. An Offer to Purchase may be made in advance of a Change of Control(an “Advanced Offer to Purchase”), conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time such Advanced Offer to Purchase is made. The Issuer will not be required to make another Change of Control Offer if an Advanced Offer to Purchase has already been made.

 

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The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with any Offer to Purchase described above. To the extent that the provisions of any securities laws or regulations conflict with Section 3.8 or this Section 4.14, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.8 or this Section 4.14 by virtue of such compliance.

 

In the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes accept a Change of Control Offer (or Advanced Offer to Purchase) and the Issuer purchases all of the Notes held by such Holders, within 90 days of such purchase, the Issuer will have the right, upon not less than 30 days’ nor more than 60 days’ prior notice, to redeem all of the Notes that remain outstanding following such purchase at the Purchase Price plus, to the extent not included in the Purchase Price, accrued and unpaid interest on the Notes to the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).

 

SECTION 4.15 Maintenance of Properties, Corporate Existence and Insurance.

 

Subject to and in compliance with the provisions of Article X, all property (including equipment) material to, and used or useful in the conduct of the business of, the Issuer and its Restricted Subsidiaries, taken as whole, shall be maintained and kept in good operating condition and working order (ordinary wear and tear and casualty loss excepted), and the Issuer and its Restricted Subsidiaries shall make any repairs, replacements and improvements thereto as they determine to be reasonable and prudent; provided that the Issuer and its Restricted Subsidiaries shall not be obligated to comply with the foregoing provisions of this Section 4.15 to the extent that the failure to do so would not result in a material adverse effect on the ability of the Issuer and its Restricted Subsidiaries to satisfy their obligations under the Notes, the Guarantees and this Indenture.

 

The Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership, limited liability company or other existence of each of its Restricted Subsidiaries in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Subsidiary and the rights (charter and statutory), licenses and franchises of the Issuer and its Restricted Subsidiaries; provided that (a) this Section 4.15 shall not apply to any transaction or series of transactions to which Article V is applicable and (b) the Issuer shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors of the Issuer shall determine, in its discretion, that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries and that the loss thereof would not result in a material adverse effect on the ability of the Issuer and its Restricted Subsidiaries to satisfy their obligations under the Notes, the Guarantees and this Indenture.

 

The Issuer will provide or cause to be provided, for itself and its Restricted Subsidiaries, insurance (including appropriate self-insurance) on its and its Subsidiaries business, with recognized, financially sound insurers or with the government of the United States of America,

 

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or an agency or instrumentality thereof, in such amounts, with such deductibles and by such methods as are determined by the Issuer in good faith to be reasonable and prudent, taking into account the risks that are usually insured against in the same general area by companies engaged in the same business or a business that the Issuer deems reasonably similar (in each case, after giving effect to any self-insurance determined by the Issuer to be reasonable and prudent).

 

SECTION 4.16 Limited Condition Transactions.

 

When calculating the availability under any basket or ratio under this Indenture or compliance with any provision of this Indenture in connection with any Limited Condition Transaction, any actions or transactions related thereto (including, without limitation, acquisitions, Investments, the Incurrence of Debt and the use of proceeds therefrom, the incurrence of Liens and Restricted Payments), and determining compliance with Defaults and Events of Default, in each case, at the option of the Issuer (the Issuer’s election to exercise such option, an “LCT Election”), the date of determination for availability under any such basket or ratio and whether any such action or transaction is permitted (or any requirement or condition therefor is complied with or satisfied (including, without limitation, as to the absence of any continuing Default or Event of Default)) under this Indenture shall be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (or, if applicable, the date of delivery of an irrevocable notice or similar event) (the “LCT Test Date”), and if, after giving effect to the Limited Condition Transaction and any actions or transactions related thereto (including, without limitation, acquisitions, Investments, the Incurrence of Debt and the use of proceeds therefrom, the incurrence of Liens and Restricted Payments) on a Pro Forma Basis, the Issuer or any of its Restricted Subsidiaries would have been permitted to take such actions or consummate such transactions on the relevant LCT Test Date in compliance with such ratio, test or basket (and any related requirements and conditions), such ratio, test or basket (and any related requirements and conditions) shall be deemed to have been complied with (or satisfied) for all purposes under this Indenture (in the case of Debt, for example, whether such Debt is committed, issued or otherwise Incurred at the LCT Test Date or at any time thereafter); provided, that compliance with such ratios, tests or baskets (and any related requirements and conditions) shall not be determined or tested at any time after the applicable LCT Test Date for such Limited Condition Transaction or any actions or transactions related thereto (including, without limitation, acquisitions, Investments, the Incurrence of Debt and the use of proceeds therefrom, the incurrence of Liens and Restricted Payments).

 

For the avoidance of doubt, if the Issuer has made an LCT Election, (1) if any of the ratios, tests or baskets for which compliance was determined or tested as of the LCT Test Date would at any time after the LCT Test Date have been exceeded or otherwise failed to have been complied with as a result of fluctuations in any such ratio, test or basket, including due to fluctuations in Consolidated EBITDA or Consolidated Total Assets of the Issuer or the Person subject to such Limited Condition Transaction, such baskets, tests or ratios will not be deemed to have been exceeded or failed to have been complied with as a result of such fluctuations; (2) if any related requirements and conditions (including as to the absence of any continuing Default or Event of Default) for which compliance or satisfaction was determined or tested as of the LCT Test Date would at any time after the LCT Test Date not have been complied with or satisfied (including due to the occurrence or continuation of an Default or Event of Default), such requirements and conditions will not be deemed to have been failed to be complied with or

 

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satisfied (and such Default or Event of Default shall be deemed not to have occurred or be continuing); and (3) in calculating the availability under any ratio, test or basket in connection with any action or transaction unrelated to such Limited Condition Transaction following the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement or date for redemption, purchase or repayment specified in an irrevocable notice for such Limited Condition Transaction is terminated, expires or passes, as applicable, without consummation of such Limited Condition Transaction, any such ratio, test or basket shall be determined or tested giving pro forma effect to such Limited Condition Transaction.

 

SECTION 4.17 Additional Note Guarantees.

 

After the Escrow Release Date, the Issuer will cause each existing and subsequently acquired or organized direct or indirect wholly-owned U.S. organized Restricted Subsidiary that guarantees the Debt under the ABL Credit Facility or any other Debt for borrowed money in a principal amount in excess of $30.0 million to Guarantee the Notes (collectively, the “Guarantors”).

 

Any Restricted Subsidiary that becomes a Guarantor after the Escrow Release Date shall execute a supplemental indenture, in accordance with the terms of this Indenture, pursuant to which such Restricted Subsidiary shall unconditionally Guarantee, on a senior basis, all of the Issuer’s Obligations under the Notes upon the terms set forth in this Indenture.

 

SECTION 4.18 Limitation on Creation of Unrestricted Subsidiaries.

 

The Issuer may designate any of its Subsidiaries to be an “Unrestricted Subsidiary” as provided below, in which event such Subsidiary and each other Person that is a Subsidiary of such Subsidiary will be deemed to be an Unrestricted Subsidiary.

 

Unrestricted Subsidiary” means:

 

(i)                                     any Subsidiary of the Issuer designated as such by the Board of Directors of the Issuer after the Issue Date as set forth below; and

 

(ii)                                  any Subsidiary of an Unrestricted Subsidiary;

 

After the Issue Date, the Issuer may designate any Subsidiary of the Issuer to be an Unrestricted Subsidiary unless after giving effect to such designation, such Subsidiary would own any Equity Interests of, or would own or hold any Lien on any property of, any other Restricted Subsidiary of the Issuer; provided that either:

 

(x)                                 the Subsidiary to be so designated has total assets (determined on a consolidated basis in accordance with GAAP) of $100,000 or less; or

 

(y)                                 the Issuer could make a Restricted Payment or Permitted Investment in an amount equal to the greater of the Fair Market Value or book value of such Subsidiary pursuant to Section 4.7 and such amount is thereafter treated as a Restricted Payment or

 

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Permitted Investment, as applicable, for the purpose of calculating the amount available for Restricted Payments or Permitted Investments thereunder.

 

An Unrestricted Subsidiary may be designated as a Restricted Subsidiary if (i) all the Debt of such Unrestricted Subsidiary could be Incurred under Section 4.9 and (ii) all the Liens on the property and assets of such Unrestricted Subsidiary could be incurred under Section 4.12.

 

Notwithstanding anything in this Indenture to the contrary, (a) the Issuer and its Restricted Subsidiaries shall not, directly or indirectly, transfer any material intellectual property to any Unrestricted Subsidiary, except pursuant to a non-exclusive license agreement, (b) no Unrestricted Subsidiary, shall, directly or indirectly, make any Investment in the Issuer or any parent entity of the Issuer, or purchase any Equity Interests of the Issuer or any parent entity of the Issuer, and (c) no Unrestricted Subsidiary shall, directly or indirectly, sell or issue any Equity Interests to any equity holder of the Issuer or any parent entity of the Issuer.

 

SECTION 4.19 [Reserved].

 

SECTION 4.20 Suspension of Covenants.

 

(a)                                 The covenants contained in Section 4.7; Section 4.8; Section 4.9; Section 4.10; Section 4.11; clauses (ii) and (iii) of Section 4.13 and clause (vii) of Section 5.1 (collectively, the “Suspended Covenants”) will not apply during any period during which the Notes have an Investment Grade Status (a “Suspension Period”).

 

(b)                                 Additionally, during any Suspension Period, the Issuer will no longer be permitted to designate any Restricted Subsidiary as an Unrestricted Subsidiary.

 

(c)                                  In the event that the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date”) the Notes cease to have Investment Grade Status, then the Suspended Covenants will apply with respect to events occurring following the Reversion Date (unless and until the Notes subsequently attain an Investment Grade Status, in which case the Suspended Covenants will again be suspended for such time that the Notes maintain an Investment Grade Status); provided, however, that no Default, Event of Default or breach of any kind will be deemed to exist under any of the Note Documents with respect to the Suspended Covenants, and none of the Issuer or any of its Subsidiaries will bear any liability for any actions taken or events occurring during a Suspension Period and before any related Reversion Date, or any actions taken at any time pursuant to any contractual obligation or binding commitment arising prior to such Reversion Date, regardless of whether those actions or events would have been permitted if the applicable Suspended Covenant had remained in effect during such period.

 

On each Reversion Date, all Debt Incurred during the Suspension Period prior to such Reversion Date will be deemed to be Debt existing on the Issue Date. For purposes of calculating the amount available to be made as Restricted Payments under clause (c) of the first paragraph of Section 4.7 on or after the Reversion Date, such calculations shall be made as though such covenant had been in effect during the entire period of time after the Issue Date (including the Suspension Period).

 

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Restricted Payments made during the Suspension Period not otherwise permitted pursuant to any of clauses (ii) through (xvi) under the second paragraph of Section 4.7 will reduce the amount available to be made as Restricted Payments under clause (c) of the first paragraph of Section 4.7; provided that the amount available to be made as Restricted Payments on the Reversion Date shall not be reduced to below zero solely as a result of such Restricted Payments. In addition, for purposes of the other Suspended Covenants all agreements entered into and all actions taken during the Suspension Period, including the Incurrence of Debt shall be deemed to have been taken or to have existed prior to the Issue Date.

 

The Issuer, in an Officer’s Certificate, shall provide the Trustee notice of any Suspension Period or Reversion Date. The Trustee will have no obligation to (i) independently determine or verify if such events have occurred, (ii) make any determination regarding the impact of actions taken during the Suspension Period on the Issuer’s future compliance with its covenants or (iii) notify the Holders of a Suspension Period or Reversion Date.

 

SECTION 4.21 Mandatory Merger and Assumption; Activities of Escrow Issuer.

 

(a)                                 Concurrently with or immediately after satisfaction of the Escrow Conditions, (i) the Escrow Merger shall be consummated and (ii) WS International shall assume all the obligations of the Escrow Issuer under this Indenture and the Notes, and become the Issuer hereunder, and shall cause each of the Initial Guarantors to become a Guarantor hereunder, in each case, pursuant to a supplemental indenture substantially in the form of Exhibit F hereto.

 

(b)                                 Prior to the consummation of the ModSpace Acquisition and the satisfaction of the Escrow Conditions:

 

(i)                                     the Escrow Issuer will comprise a limited purpose corporation whose primary activities are restricted to issuing the Notes, issuing the 2018 Senior Secured Notes, issuing capital stock to, and receiving capital contributions from, WS International, performing its obligations in respect of the Notes under this Indenture and the Escrow Agreement, performing its obligations under the 2018 Senior Secured Notes under the 2018 Senior Secured Notes Indenture and the escrow agreement entered into in connection therewith and consummating the Escrow Conditions (and the similar escrow conditions with respect to the 2018 Senior Secured Notes) or redeeming the Notes as set forth above under Section 3.10(b) with respect to any Special Mandatory Redemption, and conducting such other activities as are necessary or appropriate to carry out the activities described above. The Escrow Issuer may not own, hold or otherwise have any interest in any asset other than the proceeds of the Notes and other amounts on deposit in the Escrow Account, the proceeds of the 2018 Senior Secured Notes and other amounts on deposit in any escrow account into which such proceeds are deposited and cash.

 

(ii)                                  the Escrow Issuer will not engage in any business activity or enter into any transaction or agreement (including, without limitation, making any restricted payment, incurring any Debt (other than the 2018 Senior Secured Notes), incurring any Liens except in favor of the Holders (other than Liens with respect to the escrow account for the benefit of the trustee and/or holders of the 2018 Senior Secured Notes), entering into any merger, consolidation or sale of all or substantially all of its assets or engaging in any

 

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transaction with its Affiliates) except in the ordinary course of business or reasonably necessary to effectuate the Transactions, including the Escrow Merger.

 

SECTION 4.22 Covenant Compliance Prior to the Escrow Release Date.

 

On and following the Escrow Release Date, all restrictive covenants, except for any covenant which, by its terms, is incapable of being complied with prior to the Escrow Release Date by the Issuer and each Person that is a Guarantor on the Escrow Release Date, will be deemed to have been applicable to the Issuer and such Guarantors, as applicable, as if in effect throughout the period from the Issue Date through the Escrow Release Date and, to the extent that the Issuer or any such Guarantor took any action or inaction on or after the Issue Date and prior to the Escrow Release Date that would have breached any restrictive covenant of the Indenture as if it had been applicable at such time, then the Issuer will be in Default as of the Escrow Release Date; provided that any such Default will not prevent a release of the Escrow Property pursuant to the Escrow Agreement and no such Default or Event of Default will be deemed to have occurred if such Default or Event of Default no longer exists on the Escrow Release Date.  Prior to the Escrow Release Date, the restrictive covenants of the Indenture will not be considered applicable to WS International or such Guarantors notwithstanding anything herein to the contrary.

 

Article V

 

SUCCESSORS

 

SECTION 5.1 Consolidation, Amalgamation, Merger, Conveyance, Transfer or Lease.

 

The Issuer shall not, in any transaction or series of related transactions (i) consolidate or amalgamate with or merge with or into any other Person (other than a consolidation, or merger or amalgamation, of a Restricted Subsidiary into the Issuer in which the Issuer is the continuing or surviving Person, or the consolidation, or merger or amalgamation, of a Restricted Subsidiary into or with another Restricted Subsidiary or another Person that as a result of such transaction or series of transactions becomes, consolidates with, or amalgamates or merges into a Restricted Subsidiary) or (ii) sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the property and assets of, the Issuer and its Restricted Subsidiaries, taken as a whole, to any other Person, unless:

 

(i)                                     either:

 

(a)                                 if the transaction or series of transactions is a consolidation or amalgamation of the Issuer with, or a merger of the Issuer with or into, any other Person, the Issuer shall be the surviving Person of such consolidation, amalgamation or merger; or

 

(b)                                 if the transaction or series of transactions is a consolidation or amalgamation of the Issuer with, or a merger of the Issuer with or into, any other Person, or involves the sale, assignment, conveyance, lease, disposal or other transfer of all or substantially all of the assets or properties of the Issuer, the

 

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Person formed by such consolidation or amalgamation or into which the Issuer is merged, or to which all or substantially all of such properties and assets are sold, assigned, conveyed, transferred, leased or otherwise disposed of (such Person, the “Surviving Entity”) shall be a corporation, partnership, limited liability company or similar entity organized and existing under the laws of the United States, any political subdivision thereof or any state thereof or the District of Columbia, and such Person shall expressly assume by supplemental indenture, all of the Obligations of the Issuer under this Indenture;

 

(ii)                                  immediately after giving effect to such transaction or series of related transactions on a Pro Forma Basis (including any Debt Incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing and have resulted therefrom;

 

(iii)                               [reserved];

 

(iv)                              [reserved];

 

(v)                                 after giving effect to any such transaction or series of transactions on a Pro Forma Basis (including any Debt Incurred or anticipated to be Incurred in connection with or in respect of such transaction or series of transactions) as if such transaction or series of transactions had occurred on the first day of the applicable determination period, the Surviving Entity (a) would be permitted to Incur at least $1.00 of additional Debt (other than Permitted Debt) pursuant to the Consolidated Total Net Leverage Ratio test set forth under the first paragraph of Section 4.9 or (b) the Consolidated Total Net Leverage Ratio for the Surviving Entity and its Restricted Subsidiaries would not be less than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such transaction;

 

(vi)                              each Guarantor, unless it is the Surviving Entity, shall have by supplemental indenture confirmed that its Note Guarantee shall apply to the Successor Entity’s obligations under this Indenture and the Notes; and

 

(vii)                           [reserved].

 

The foregoing requirements shall not apply to any transaction or series of transactions involving the sale, assignment, conveyance, transfer, lease or other disposition of any properties or assets by any Restricted Subsidiary of the Issuer to the Issuer or any Guarantor or by any Subsidiary of the Issuer that is not a Material Subsidiary to another Subsidiary of the Issuer that is not a Material Subsidiary, or the consolidation, amalgamation or merger of any Restricted Subsidiary of the Issuer with or into the Issuer or any Guarantor or of any Subsidiary that is not a Material Subsidiary with or into another Subsidiary of the Issuer that is not a Material Subsidiary.  Clauses (ii) through (vii) of the preceding paragraph shall not apply to (a) a merger of the Issuer with an Affiliate solely for the purpose of reincorporating the Issuer in another jurisdiction, (b) a merger transaction among the Issuer or any direct or indirect parent of the Issuer or (c) a merger, consolidation or amalgamation of a Foreign Subsidiary with another

 

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Foreign Subsidiary or the sale, assignment, conveyance, transfer, lease or other disposition of any properties or assets of a Foreign Subsidiary to another Foreign Subsidiary.

 

In connection with any consolidation, amalgamation, merger, sale, assignment, conveyance, transfer, lease or other disposition contemplated by the foregoing provisions, the Issuer shall deliver, or cause to be delivered, to the Trustee, an Officer’s Certificate and an Opinion of Counsel, each to the effect that such consolidation, amalgamation, merger, sale, assignment, conveyance, transfer, lease or other disposition complies with the requirements of this Indenture.

 

For the avoidance of doubt, notwithstanding the foregoing, the Escrow Issuer may merge into WS International pursuant to the Escrow Merger, without regard to the requirements set forth in this Section 5.1 in connection with the release of funds from the Escrow Account pursuant to the Escrow Agreement.

 

SECTION 5.2 Successor Person Substituted.

 

Upon the consummation of any transaction or series of related transactions that are of the type, and are effected in accordance with the conditions, described in Section 5.1 and for which there is a Surviving Entity (other than the Issuer) (i) the Surviving Entity shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Note Documents with the same effect as if such Surviving Entity had originally been named as the Issuer therein; and (ii) when a Surviving Entity duly assumes all of the obligations and covenants of the Issuer pursuant to this Indenture, the Notes and the Note Guarantees, as applicable, the predecessor Person shall be released from of all of its Obligations and covenants under the Note Documents, except in the case of a lease.

 

Article VI

 

DEFAULTS AND REMEDIES

 

SECTION 6.1 Events of Default.

 

Each of the following constitutes an “Event of Default”:

 

(1)         default in the payment when due of the principal of, and premium then due on, any Note (whether at Stated Maturity, upon redemption or otherwise);

 

(2)         default in the payment of any interest upon any Note when it becomes due and payable, and continuance of such default for a period of 30 days;

 

(3)         failure to perform or comply with Section 5.1;

 

(4)         except as permitted by this Indenture, the Note Guarantee of any Subsidiary of the Issuer that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary), shall be held in a judicial proceeding to be unenforceable or invalid, or any Person acting on behalf of any Guarantor, shall

 

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deny or disaffirm its obligations under its Note Guarantee (other than by reason of a release of such Guarantor in accordance with this Indenture, as applicable);

 

(5)         default in the performance, or breach, of (i) any covenant or agreement of the Issuer or any Guarantor in this Indenture (other than (x) a covenant or agreement a default in whose performance or whose breach is specifically dealt with in clause (1), (2), (3) or (4) above or (y) Section 4.3), and continuance of such default or breach for a period of 60 days after written notice thereof has been given to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in aggregate principal amount of the outstanding Notes or (ii) Section 4.3 and continuance of such default or breach for a period of 120 days after written notice thereof has been given to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in aggregate principal amount of the outstanding Notes;

 

(6)         default under any bonds, debentures, notes or other evidences of Debt for money borrowed (other than the Notes) by the Issuer or any of its Restricted Subsidiaries whether such Debt exists on the Issue Date or shall thereafter be created, which default (A) is caused by a failure to pay the principal of such Debt when due and payable after the expiration of any applicable grace period provided in such Debt (a “Payment Default”) or (B) results in the acceleration of such Debt prior to its Stated Maturity and, in each case, the principal amount of any such Debt, together with the principal amount of any other such Debt under which there has been a Payment Default or the maturity of which has been so accelerated and remains unpaid, aggregates in excess of $40.0 million;

 

(7)         failure by the Issuer or any Restricted Subsidiary that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary) to pay final and non-appealable judgments aggregating in excess of $40.0 million, which are not covered by indemnities or third-party insurance, which judgments are not paid, discharged, vacated or stayed for a period of 60 consecutive days;

 

(8)         the Issuer or any Restricted Subsidiary that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary), pursuant to or under or within the meaning of any Bankruptcy Law:

 

(a)         commences a voluntary case or proceeding;

 

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

 

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

 

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

 

(e)          admits, in writing, its inability generally to pay its debts as they become due; or

 

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

 

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(i)                         is for relief against the Issuer or any Restricted Subsidiary that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary), in an involuntary case or proceeding;

 

(ii)                      appoints a Custodian of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) or for all or substantially all of the property of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary); or

 

(iii)                   orders the liquidation of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary);

 

and the order or decree remains unstayed and in effect for 60 consecutive days.

 

SECTION 6.2 Acceleration.

 

If an Event of Default (other than an Event of Default specified in clause (8) of Section 6.1 with respect to the Issuer) occurs and is continuing, then and in every such case, the Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding Notes may declare the principal amount of the Notes, the premium amount that would be due if the Notes were repaid or called for redemption on such date, and any accrued and unpaid interest on the Notes to be due and payable immediately by a notice in writing to the Issuer (and to the Trustee if given by Holders); provided, however, that after such acceleration, but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of the outstanding Notes may rescind and annul such acceleration if (i) all Events of Default, other than the nonpayment of accelerated principal of or interest on the Notes, have been cured or waived as provided herein and (ii) such rescission or annulment would not conflict with any decree of judgment of a court of competent jurisdiction.

 

In the event of a declaration of acceleration of the Notes because an Event of Default described in clause (6) of Section 6.1 has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically rescinded and annulled if the event of default or payment default triggering such Event of Default pursuant to clause (6) of Section 6.1 shall be remedied or cured by the Issuer or such Restricted Subsidiary or waived by the holders of the relevant Debt within 30 Business Days after the declaration of acceleration with respect thereto and if the rescission and annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction obtained by the Trustee for the payment of amounts due on the Notes.

 

If an Event of Default specified in clause (8) of Section 6.1 occurs with respect to the Issuer, the principal amount of the Notes, together with a payment equal to the premium that would be due on such date if the Notes had been repaid or called for redemption on such date, and any accrued and unpaid interest on the Notes then outstanding shall ipso facto become

 

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immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Trustee may withhold from Holders notice of any Default (except Default in payment of principal of, premium, if any, and interest on, any Note) if the Trustee determines that withholding notice is in the interests of the Holders.

 

SECTION 6.3 Other Remedies.

 

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

 

SECTION 6.4 Waiver of Past Defaults.

 

The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under this Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes (other than as a result of an acceleration), which shall require the written consent of all of the Holders of the Notes then outstanding.

 

SECTION 6.5 Control by Majority.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, (i) the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders or that may involve the Trustee in personal liability, and (ii) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

 

SECTION 6.6 Limitation on Suits.

 

No Holder of any Note will have any right to institute any proceeding with respect to this Indenture or for any remedy hereunder, unless:

 

(a)                                 such Holder shall have previously given the Trustee written notice of a continuing Event of Default;

 

(b)                                 the Holders of at least 25% in aggregate principal amount of the outstanding Notes shall have in writing requested the Trustee to institute such proceeding;

 

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(c)                                  such Holders shall have offered the Trustee indemnity reasonably satisfactory to the Trustee; and

 

(d)                                 the Trustee shall not have received from the Holders of a majority in aggregate principal amount of the outstanding Notes a written direction inconsistent with such request and shall have failed to institute such proceeding within 60 days.

 

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

 

SECTION 6.7 Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal, premium, if any, and interest on or after the respective due dates expressed in the Note (including in connection with an Offer to Purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

SECTION 6.8 Collection Suit by Trustee.

 

If an Event of Default specified in Section 6.1(1) or (2) occurs and is continuing, without the possession of any of the Notes or the production thereof in any proceeding related thereto, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the reasonable costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee (including without limitation any amounts due to the Trustee pursuant to Section 7.7), its agents and counsel.

 

SECTION 6.9 Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other securities or property payable or deliverable upon the conversion or exchange of the Notes or on any such claims and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the

 

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Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

SECTION 6.10 Priorities

 

Any money or property collected by the Trustee pursuant to this Article VI and any money or other property distributable in respect of the Issuer’s obligations under this Indenture after an Event of Default shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money or property on account of principal (or premium, if any) or interest, if any, upon presentation of the Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

First: to the Trustee and Escrow Agent (including any predecessor Trustee and any predecessor Escrow Agent), its agents and attorneys for amounts due under Section 7.7, including payment of all reasonable compensation, fees, expenses and liabilities incurred, and all advances made, by the Trustee and Escrow Agent and the costs and expenses of collection;

 

Second: to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest respectively;

 

Third: without duplication, to the Holders for any other Obligations owing to the Holders under this Indenture and the Notes; and

 

Fourth: to the Issuer or to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

 

SECTION 6.11 Undertaking for Costs

 

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

 

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Article VII

 

TRUSTEE

 

SECTION 7.1 Duties of Trustee.

 

(a)                                 If an Event of Default has occurred and is continuing and is actually known to a Responsible Officer of the Trustee, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)                                 Except during the continuance of an Event of Default:

 

(i)                                     the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Escrow Agreement and the Trustee need perform only those duties that are specifically set forth in this Indenture and the Escrow Agreement and no others, and no implied covenants or obligations shall be read into this Indenture or the Escrow Agreement against the Trustee; and

 

(ii)                                  in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture or the Escrow Agreement. However, the Trustee shall be under a duty to examine the certificates and opinions specifically required to be furnished to it to determine whether or not they conform on their face to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts or conclusions stated therein).

 

(c)                                  The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(i)                                     this paragraph does not limit the effect of paragraphs (b) or (e) of this Section 7.1;

 

(ii)                                  the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Trustee, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)                               the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it in accordance with the terms hereof.

 

(d)                                 [reserved].

 

(e)                                  No provision of this Indenture or the Escrow Agreement shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of their rights and powers under this Indenture or the Escrow Agreement at the

 

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request of any Holder, unless such Holder shall have offered to the Trustee, as applicable, security and indemnity satisfactory to it against any loss, liability or expense.

 

(f)                                   The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)                                  The Trustee will be permitted to engage in other transactions; provided, however, that if it acquires any conflicting interest it must eliminate such conflict within 90 days or resign.

 

(h)                                 The Trustee agrees to accept and act upon facsimile or electronic transmission of manually-signed documents (including portable document format) hereunder.

 

SECTION 7.2 Rights of Trustee

 

(a)                                 The Trustee may conclusively rely and shall be fully protected in acting or refraining from acting on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in any such document.

 

(b)                                 Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of the Trustee’s own choosing and the Trustee shall be fully protected from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance on the advice or opinion of such counsel or on any Opinion of Counsel.

 

(c)                                  The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or agent appointed with due care.

 

(d)                                 The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture or the Escrow Agreement. Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Officer’s Certificate and a Board Resolution delivered to the Trustee. Whenever in the administration of this Indenture or the Escrow Agreement the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of negligence or willful misconduct on its part, conclusively rely upon an Officer’s Certificate.

 

(e)                                  Unless otherwise specifically provided in this Indenture or the Escrow Agreement, any demand, request, direction or notice from the Issuer or a Guarantor shall be sufficient if signed by an Officer of the Issuer or such Guarantor.

 

(f)                                   The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security and indemnity reasonably satisfactory to the Trustee

 

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against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

 

(g)                                  The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or documents, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall have reasonable access after reasonable notice during normal business hours to the books, records and premises of the Issuer or any Guarantor, personally or by agent or attorney and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

 

(h)                                 The rights, privileges, protections and benefits given to the Trustee, including its rights to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Persons employed to act hereunder.

 

(i)                                     The permissive right of the Trustee to take or refrain from taking any actions enumerated in this Indenture shall not be construed as a duty.

 

(j)                                    In the event that the Trustee (in such capacity or in any other capacity hereunder or under the Escrow Agreement) is unable to decide between alternative courses of action permitted or required by the terms of this Indenture or the Escrow Agreement, or in the event that the Trustee is unsure as to the application of any provision of this Indenture or the Escrow Agreement, or believes any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Indenture or the Escrow Agreement permits any determination by or the exercise of discretion on the part of the Trustee or is silent or is incomplete as to the course of action that the Trustee is required to take with respect to a particular set of facts, the Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Holders requesting instruction as to the course of action to be adopted, and to the extent the Trustee acts in good faith in accordance with any written instructions received from a majority in aggregate principal amount of the then outstanding Notes, the Trustee shall not be liable on account of such action to any Person. If the Trustee shall not have received appropriate instruction within 10 days of such notice (or such shorter period as reasonably may be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action as it shall deem to be in the interests of the Holders and the Trustee shall have no liability to any Person for such action or inaction.

 

SECTION 7.3 Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11.

 

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SECTION 7.4 Trustee’s Disclaimer

 

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes or the Escrow Agreement, shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein, any statement in the Notes, or any statement or recital in any document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication on the Notes. The Trustee shall not be responsible for calculating the Applicable Premium, or determining whether such amounts are due.

 

SECTION 7.5 Notice of Defaults

 

If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders a notice of the Default within 90 days after it occurs, or if discovered after such 90 day period, promptly after the Trustee learns of such Default (unless such Default shall have been cured or waived). Except in the case of a Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of the Holders.

 

The Trustee shall not be deemed to have notice or be charged with knowledge of any Default or Event of Default (other than a Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the Notes)unless a Responsible Officer of the Trustee has actual knowledge thereof or shall have received written notice thereof at its address set forth in Section 12.2 from the Issuer, any Guarantor or Holders of 25% in aggregate principal amount of the then outstanding Notes specifying the occurrence and nature thereof and stating that such notice is a notice of default.

 

SECTION 7.6 [Reserved]

 

SECTION 7.7 Compensation and Indemnity

 

The Issuer shall pay to the Trustee from time to time compensation as shall be agreed to in writing by the Issuer and the Trustee for its acceptance of this Indenture and services hereunder (it being hereby agreed that the compensation set forth in any fee letter between the Issuer and the Trustee shall be deemed to be reasonable). The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements, fees and expenses of the Trustee’s agents and counsel.

 

The Issuer and the Guarantors, jointly and severally, shall indemnify the Trustee (which for purposes of this Section 7.7 shall include its officers, directors, agents and employees) against any and all claims, damages, losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including

 

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the costs and expenses of enforcing this Indenture against the Issuer (including this Section 7.7) and defending itself against any claim (whether asserted by the Issuer or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, claim, damage, liability or expense may be attributable to its negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction. The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of one such counsel. The Issuer and the Guarantors need not pay for any settlement made without their consent, which consent shall not be unreasonably withheld.

 

The obligations of the Issuer and the Guarantors under this Section 7.7 shall survive the satisfaction and discharge or termination for any reason of this Indenture, including any termination or rejection hereof under any Bankruptcy Law, or the resignation or removal of the Trustee.

 

To secure the Issuer’s and the Guarantors’ obligations in this Section 7.7, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal, premium, if any, or interest, if any, on particular Notes. Such Lien shall survive the satisfaction and discharge or termination for any reason of this Indenture and the resignation or removal of the Trustee.

 

In addition, and without prejudice to the rights provided to the Trustee under any of the provisions of this Indenture, when the Trustee incurs expenses or renders services after an Event of Default specified in clause (8) of the first paragraph of Section 6.1 occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

“Trustee” for the purposes of this Section 7.7 shall include any predecessor Trustee and the Trustee in each of its capacities hereunder and each agent, custodian and other person employed to act hereunder or under the Escrow Agreement; provided, however, that the negligence or willful misconduct of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.

 

The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.

 

SECTION 7.8 Replacement of Trustee

 

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.8.

 

The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

 

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(a)                                 the Trustee fails to comply with Section 7.10;

 

(b)                                 the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(c)                                  a Custodian or public officer takes charge of the Trustee or its property; or

 

(d)                                 the Trustee becomes incapable of acting.

 

If the Trustee resigns, is removed or becomes incapable of acting, or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee.

 

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee, after written request by any Holder who has been a Holder for at least six (6) months, fails to comply with Section 7.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and the duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided that all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.7. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Issuer’s obligations under and the Lien provided for in Section 7.7 shall continue for the benefit of the retiring Trustee.

 

SECTION 7.9 Successor Trustee by Merger, Etc.

 

Any entity into which the Trustee or any Agent may be merged or converted or with which the Trustee or any Agent may be consolidated, or any entity resulting from any merger, conversion or consolidation to which the Trustee or any Agent shall be a party, or any entity succeeding to all or substantially all of the corporate trust business of the Trustee or any Agent, shall be the successor of the Trustee or any Agent hereunder, as applicable, provided such entity shall be otherwise qualified and eligible under this Article VII, to the extent operative, without the execution or filing of any document or further act on the part of any of the parties hereto. In the case any Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes.

 

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SECTION 7.10 Eligibility; Disqualification

 

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trust power and that is subject to supervision or examination by federal or state authorities. The Trustee shall at all times have a combined capital surplus of at least $50.0 million as set forth in its most recent annual report of condition. If at any time the Trustee ceases to be eligible in accordance with the provisions of this Section 7.10, it shall resign immediately in the manner and with the effect specified in this Article VII.

 

This Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b) including the provision in § 310(b)(1); provided that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Issuer or the Guarantors are outstanding if the requirements for exclusion set forth in TIA § 310(b)(1) are met.

 

SECTION 7.11 Preferential Collection of Claims Against the Issuer

 

The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

 

SECTION 7.12 Trustee’s Application for Instructions from the Issuer

 

Any application by the Trustee for written instructions from the Issuer may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than twenty (20) Business Days after the date any Officer of the Issuer actually receives such application, unless any such Officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

 

SECTION 7.13 Limitation of Liability

 

In no event shall the Trustee, Paying Agent or Registrar or in any other capacity hereunder, be liable under or in connection with this Indenture for indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if the Trustee, Paying Agent or Registrar or in any other capacity hereunder, has been advised of the possibility thereof and regardless of the form of action in which such damages are sought. The Trustee and/or the Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of

 

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utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil or military authority and governmental action. The provisions of this Section 7.13 shall survive satisfaction and discharge or the termination for any reason of this Indenture and the resignation or removal of the Trustee, or the Agent.

 

SECTION 7.14 Holders’ Authorization to Trustee.

 

By their purchase of the Notes, the Holders hereby authorize and direct the Trustee to execute and deliver the Escrow Agreement and to perform its obligations thereunder.  The Trustee shall have all of the rights, benefits, privileges, protections, indemnities, and immunities set forth in this Indenture in connection with the Escrow Agreement.

 

SECTION 7.15 [Reserved].

 

Article VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

SECTION 8.1 Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Issuer may, at its option and at any time evidenced by a Board Resolution set forth in an Officer’s Certificate, elect to have either Section 8.2 or 8.3 applied to all outstanding Notes upon compliance with the conditions set forth below in this Article VIII.

 

SECTION 8.2 Legal Defeasance.

 

Upon the Issuer’s exercise under Section 8.1 of the option applicable to this Section 8.2, the Issuer shall, subject to the satisfaction of the conditions set forth in Section 8.4, be deemed to have been discharged from its obligations with respect to all outstanding Notes, and all obligations of the Guarantors shall be deemed to have been discharged with respect to their Note Guarantees, on the date the conditions set forth below are satisfied (hereinafter, “legal defeasance”). For this purpose, legal defeasance means that the Issuer shall be deemed to have paid and discharged the entire Debt represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.5 and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all of its other obligations under such Notes and this Indenture (and the Trustee, on written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

 

(a)                                 the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due from the trust referred to in Section 8.4(l);

 

(b)                                 the Issuer’s obligations with respect to the Notes under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.10 and 4.2;

 

(c)                                  the rights, powers, trusts, duties and immunities of the Trustee and the Issuer’s and the Guarantors’ obligations in connection therewith; and

 

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(d)                                 the provisions of this Article VIII.

 

Subject to compliance with this Article VIII, the Issuer may exercise its option under this Section 8.2 notwithstanding the prior exercise of its option under Section 8.3.

 

SECTION 8.3 Covenant Defeasance.

 

Upon the Issuer’s exercise under Section 8.1 of the option applicable to this Section 8.3, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.4, be released from their obligations under the covenants contained in Sections 4.3, 4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.18, 4.19, 4.20 and 5.1 with respect to the outstanding Notes and Note Guarantees on and after the date the conditions set forth below are satisfied (hereinafter, “covenant defeasance” and, together with legal defeasance, “defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, covenant defeasance means that, with respect to the outstanding Notes, the Issuer or any of its Subsidiaries may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.1, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.1 of the option applicable to this Section 8.3, subject to the satisfaction of the conditions set forth in Section 8.4, clauses (3), (4), (5), (6), (7) and (9) of the first paragraph of Section 6.1 shall not constitute Events of Default.

 

SECTION 8.4 Conditions to Legal Defeasance or Covenant Defeasance.

 

The following shall be the conditions to the application of either Section 8.2 or 8.3 to the outstanding Notes:

 

(1)                                 the Issuer must irrevocably deposit or cause to be irrevocably deposited with the Trustee, in trust, for the benefit of the Holders, cash in U.S. Dollars, non-callable U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent chartered public accountants, expressed in a written opinion thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee to pay the principal of, premium, if any, and interest on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Issuer must specify whether the Notes are being defeased to Stated Maturity or to a particular redemption date;

 

(2)                                 in the case of legal defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Issuer has received from, or there has

 

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been published by, the Internal Revenue Service a ruling or (B) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders and beneficial owners of the outstanding Notes will not recognize gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred;

 

(3)                                 in the case of covenant defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders and beneficial owners of the outstanding Notes will not recognize gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;

 

(4)                                 no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit or the granting of any Lien to secure such borrowing);

 

(5)                                 such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Issuer is a party or by which the Issuer is bound; and

 

(6)                                 the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each to the effect that all conditions precedent relating to such legal defeasance or covenant defeasance have been satisfied.

 

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to a legal defeasance need not to be delivered if all Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable by reason of the mailing of a notice of redemption or otherwise, (y) will become due and payable within one year or (z) are to be called for redemption within one year under arrangements reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee.

 

SECTION 8.5 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.

 

Subject to Section 8.6, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.5, the “Trustee”) pursuant to Section 8.4 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or any Subsidiary thereof acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon

 

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in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

 

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section 8.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

 

Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the written request of the Issuer and be relieved of all liability with respect to any money or non-callable U.S. Government Obligations held by it as provided in Section 8.4 which, in the opinion of a nationally recognized firm of independent chartered public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.4(1)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent legal defeasance or covenant defeasance.

 

SECTION 8.6 Repayment to Issuer.

 

Subject to applicable law, any money or property deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest, if any, on any Note and remaining unclaimed for one (1) year after such principal and premium, if any, or interest has become due and payable shall be paid to the Issuer on its written request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money or property then remaining shall be repaid to the Issuer.

 

SECTION 8.7 Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any U.S. Dollars or non-callable U.S. Government Obligations in accordance with Section 8.2 or 8.3, as the case may be, by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, then the obligations of the Issuer under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.2 or 8.3, as the case may be; provided, however, that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or property held by the Trustee or Paying Agent.

 

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SECTION 8.8 Discharge.

 

This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder (subject to those provisions that by their express terms shall survive) (a “Discharge”), when:

 

(1)                                 either

 

(A)                               all Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to the Issuer) have been delivered to the Trustee for cancellation, or

 

(B)                               all Notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable by reason of the mailing of a notice of redemption or otherwise, (ii) will become due and payable within one year or (iii) are to be called for redemption within one year under arrangements reasonably satisfactory to the Trustee for the giving of notice of redemption and, in each case, the Issuer has irrevocably deposited or caused to be deposited with the Trustee funds in trust of cash in U.S. Dollars, non-callable U.S. Government Obligations, or a combination thereof in an amount sufficient to pay and discharge the principal, premium, if any, and interest on, the Notes to the Stated Maturity thereof or the date of redemption, as the case may be; provided, that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of redemption (any such amount, the “Applicable Premium Deficit”) only required to be deposited with the Trustee by 11:00 am NY time on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption);

 

(2)                                 the Issuer has paid or caused to be paid all other sums then due and payable under this Indenture by the Issuer;

 

(3)                                 the deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;

 

(4)                                 the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be; and

 

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(5)                                 the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel to the Trustee, each stating that all conditions precedent under this Indenture relating to the Discharge have been satisfied.

 

Article IX

 

AMENDMENT, SUPPLEMENT AND WAIVER

 

SECTION 9.1 Without Consent of Holders.

 

Notwithstanding Section 9.2 of this Indenture, without the consent of any Holders, the Issuer, the Guarantors, the Trustee, as applicable, may amend or supplement the Note Documents to:

 

(1)                                 cure any ambiguity, defect, omission, mistake, or inconsistency or to make any modification of a formal, minor or technical nature;

 

(2)                                 evidence the succession of another Person to the Issuer or any Guarantor and the assumption by any such successor of the covenants and other obligations of the Issuer or such Guarantor under this Indenture, the Notes or the Note Guarantees;

 

(3)                                 comply with the covenant relating to consolidations, amalgamations, mergers, conveyances, transfers and leases;

 

(4)                                 add to the covenants of the Issuer or any Guarantor for the benefit of the Holders, or to surrender any right or power herein conferred upon the Issuer or any Restricted Subsidiary;

 

(5)                                 add additional Events of Default;

 

(6)                                 provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(7)                                 evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee;

 

(8)                                 provide for or confirm the issuance of Additional Notes and all related obligations in accordance with the terms of this Indenture;

 

(9)                                 add Guarantors with respect to the Notes or to release a Guarantor from its Note Guarantee in accordance with this Indenture;

 

(10)                          make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of the Holders in any material respect, as determined by the Issuer in good faith;

 

(11)                          make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including to facilitate the issuance and administration of the Notes or to comply with the rules of any

 

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applicable securities depository; provided, however, that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;

 

(12)                          [reserved];

 

(13)                          provide for the release, addition, completion, confirmation or grant of Note Guarantees permitted or required by this Indenture, including the entering into or execution of additional or supplemental indentures and/or Note Guarantees; or

 

(14)                          in the event that PIK Notes are issued in certificated form, to make appropriate amendments to this Indenture to reflect an appropriate minimum denomination of certificated PIK Notes and establish minimum redemption amounts for certificated PIK Notes.

 

SECTION 9.2 With Consent of Holders.

 

Except as provided below in this Section 9.2, the Note Documents may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and any existing Default or Event of Default or compliance with any provision of the Note Documents may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with purchase of, or tender offer or exchange offer for, the Notes); provided, however, that without the consent of each Holder of Notes affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):

 

(1)                                 change the Stated Maturity of the principal of, or any installment of interest on, any Note;

 

(2)                                 reduce the principal of, or rate of interest on, or premium payable on, any Note;

 

(3)                                 change the place of payment where, or the currency in which, the principal of, or interest or premium, if any, on any Note is payable or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof;

 

(4)                                 change the date on which any Notes may be subject to redemption or reduce the redemption price therefor (it being understood that a change to any advance notice requirement with respect to such date shall not be deemed to be a change of such date);

 

(5)                                 reduce the percentage in aggregate principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

 

(6)                                 subordinate, in right of payment, the Notes to any other Debt of the Issuer;

 

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(7)                                 waive a Default or Event of Default in the payment of principal of, premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes and the consequences thereof by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

 

(8)                                 waive a redemption payment with respect to any Note (other than a payment required by Section 4.10 or Section 4.14);

 

(9)                                 make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of holders of Notes to receive payments of principal of, premium, if any, and interest on the Notes when due and payable; or

 

(10)                          make any change in the preceding amendment and waiver provisions.

 

In addition, any amendment or supplement to, or waiver of, the provisions of the Note Documents that has the effect of releasing any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture, will, in each case, require the consent of the Holders of at least 66 2/3% in aggregate principal amount of the outstanding Notes.

 

The consent of the Holders is not necessary under this Section 9.2 to approve the particular form of any proposed amendment of any Note Document. It is sufficient if such consent approves the substance of the proposed amendment. A consent to any amendment or waiver under this Indenture by any Holder of Notes given in connection with a tender of such Holder’s Notes will not be rendered invalid by such tender.

 

For the avoidance of doubt, no amendment to, or deletion of any of the covenants described in Article IV or action taken in compliance with the covenants in effect at the time of such action, shall be deemed to impair or affect any rights of any Holder of Notes to receive payment of principal of, or premium, if any, or interest on, the Notes or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes.

 

SECTION 9.3 Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. When an amendment, supplement or waiver becomes effective in accordance with its terms, it thereafter binds every Holder.

 

The Issuer may, but shall not be obligated to, fix a record date for determining which Holders consent to such amendment, supplement or waiver. If the Issuer fixes a record date, the record date shall be fixed at (i) the later of 30 days prior to the first solicitation of such consent or

 

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the date of the most recent list of Holders furnished for the Trustee prior to such solicitation pursuant to Section 2.5 or (ii) such other date as the Issuer shall designate.

 

SECTION 9.4 Notation on or Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.

 

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

After any amendment, supplement or waiver becomes effective, the Issuer shall mail to Holders a notice briefly describing such amendment, supplement or waiver. The failure to give such notice shall not affect the validity and effect of such amendment, supplement or waiver.

 

SECTION 9.5 Trustee to Sign Amendments, Etc.

 

The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer and the Guarantors may not sign an amendment or supplemental indenture until their respective Boards of Directors approve it. In signing or refusing to sign any amendment or supplemental indenture the Trustee shall be entitled to receive and shall be fully protected in relying upon an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment or supplemental indenture is authorized or permitted by this Indenture, that all conditions precedent thereto have been satisfied or waived, that such amendment or supplemental indenture is not inconsistent herewith, and that it will be valid and binding upon the Issuer in accordance with its terms. The Trustee may but need not sign any such amendment or supplemental indenture.  In signing such amendment or supplemental indenture, the Trustee shall receive indemnity reasonably satisfactory to it.

 

Article X

 

[INTENTIONALLY OMITTED]

 

Article XI

 

NOTE GUARANTEES

 

SECTION 11.1 Note Guarantees.

 

(a)                                 Each Guarantor hereby jointly and severally, unconditionally and irrevocably guarantees the Notes and obligations of the Issuer hereunder and thereunder, and guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee on behalf of such Holder, that: (i) the principal of and premium, if any, and interest on the Notes shall be paid in full when due, whether at Stated Maturity, by acceleration, call for redemption or otherwise (including, without limitation, the amount that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), and all other obligations of the

 

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Issuer to the Holders or the Trustee hereunder or thereunder shall be paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or of any such other obligations, the same shall be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Each of the Note Guarantees of the Guarantors shall be a guarantee of payment and not of collection.

 

(b)                                 Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor.

 

(c)                                  Each Guarantor hereby waives the benefits of diligence, presentment, demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer or any other Person, protest, notice and all demands whatsoever and covenants that the Note Guarantee of such Guarantor shall not be discharged as to any Note except by complete performance of the obligations contained in such Note and such Note Guarantee or as provided for in this Indenture. Each of the Guarantors hereby agrees that, in the event of a default in payment of principal or premium, if any, or interest on such Note, whether at its Stated Maturity, by acceleration, call for redemption, purchase or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Note, subject to the terms and conditions set forth in this Indenture, directly against each of the Guarantors to enforce such Guarantor’s Note Guarantee without first proceeding against the Issuer or any other Guarantor. Each Guarantor agrees that if, after the occurrence and during the continuance of an Event of Default, the Trustee or any of the Holders are prevented by applicable law from exercising their respective rights to accelerate the maturity of the Notes, to collect interest on the Notes, or to enforce or exercise any other right or remedy with respect to the Notes, such Guarantor shall pay to the Trustee for the account of the Holders, upon demand therefor, the amount that would otherwise have been due and payable had such rights and remedies been permitted to be exercised by the Trustee or any of the Holders.

 

(d)                                 If any Holder or the Trustee is required by any court or otherwise to return to the Issuer or any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer or any Guarantor, any amount paid by any of them to the Trustee or such Holder, the Note Guarantee of each of the Guarantors, to the extent theretofore discharged, shall be reinstated in full force and effect. This paragraph (d) shall remain effective notwithstanding any contrary action which may be taken by the Trustee or any Holder in reliance upon such amount required to be returned. This paragraph (d) shall survive the termination of this Indenture.

 

(e)                                  Each Guarantor further agrees that, as between each Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Note Guarantee of such Guarantor, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event

 

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of any acceleration of such Obligations as provided in Article VI, such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of the Note Guarantee of such Guarantor.

 

SECTION 11.2 [Reserved].

 

SECTION 11.3 Severability.

 

In case any provision of any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 11.4 Limitation of Guarantors’ Liability.

 

Each Guarantor and by its acceptance hereof each Holder confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or fraudulent conveyance for purposes of the Bankruptcy Law. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the Obligations of such Guarantor under its Note Guarantee shall be limited to the maximum amount that will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the Obligations of such other Guarantor under its Note Guarantee, result in the Obligations of such Guarantor under its Note Guarantee not becoming voidable under applicable Bankruptcy Law relating to fraudulent transfer or fraudulent conveyance.

 

SECTION 11.5 Guarantors May Consolidate, Etc., on Certain Terms.

 

Subject to Section 11.6, a Guarantor (other than the Issuer) may not sell or otherwise dispose of all or substantially all of its assets, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person unless:

 

(1)                                 immediately after giving effect to such transactions, no Default or Event of Default exists;

 

(2)                                 either:

 

(A)                               the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) (the “Successor Guarantor”) assumes all the obligations of that Guarantor under this Indenture pursuant to a supplemental indenture in substantially the form attached as Exhibit E; or

 

(B)                               the Net Cash Proceeds of any such sale or other disposition are applied in accordance with the provisions of Section 4.10; and

 

(3)                                 the Issuer delivers, or causes to be delivered, to the Trustee an Officer’s Certificate and an Opinion of Counsel (upon which the Trustee shall be entitled to

 

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conclusively and exclusively rely), each stating that such sale, other disposition, consolidation or merger complies with the requirements of this Indenture.

 

In case of any such consolidation, merger, sale or conveyance and upon the assumption by the Successor Guarantor, by supplemental indenture, executed and delivered to the Trustee, of the Note Guarantee and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such Successor Guarantor shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. All the Note Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all such Note Guarantees had been issued at the date of the execution hereof.

 

Except as set forth in Articles IV and V, and notwithstanding clauses (1) and (2) above, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Issuer or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Issuer or another Guarantor.

 

Notwithstanding any provision to the contrary in this Section 11.5, Mason Merger Sub, Inc. may merger into ModSpace in connection with the ModSpace Acquisition.

 

SECTION 11.6 Release of a Guarantor.

 

The Note Guarantee of a Guarantor and its obligations under the Note Documents will be automatically and unconditionally released:

 

(a)                                 in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger, consolidation, amalgamation or otherwise) to a Person that is not (either before or after giving effect to such transaction) the Issuer or a Restricted Subsidiary of the Issuer, if the sale or other disposition does not violate Section 4.10 or Section 5.1;

 

(b)                                 in connection with any sale, issuance or other disposition of Equity Interests of that Guarantor to a Person that is not (either before or after giving effect to such transaction) the Issuer or a Restricted Subsidiary of the Issuer, if the sale, issuance or other disposition does not violate Section 4.10 and the Guarantor ceases to be a Restricted Subsidiary of the Issuer as a result of such sale, issuance or other disposition;

 

(c)                                  if the Issuer designates that Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of this Indenture;

 

(d)                                 upon receipt by the Trustee of an Officer’s Certificate certifying that such Guarantor has met the definition of an Excluded Subsidiary;

 

(e)                                  upon the release, discharge or termination of the guarantee by, or direct obligations of, such Guarantor under the ABL Credit Facility, other than a release, discharge or

 

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termination by or as a result of payment in connection with the enforcement of remedies under such guarantee or direct obligations;

 

(f)                                   upon the release of such Guarantor from its Note Guarantee with the consent of the Holders of the requisite percentage of Notes in accordance with Article IX; or

 

(g)                                  upon legal defeasance, covenant defeasance or Discharge of this Indenture under Article VIII.

 

. At the Issuer’s request and expense, the Trustee will execute and deliver any instrument evidencing the release of any Guarantor from its obligations under its Note Guarantee pursuant to this Section 11.6.

 

SECTION 11.7 Benefits Acknowledged.

 

Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that its Guarantee and waivers pursuant to its Note Guarantee are knowingly made in contemplation of such benefits.

 

SECTION 11.8 Future Guarantors.

 

Each Restricted Subsidiary of the Issuer organized under the laws of the United States, any political subdivision thereof, any state thereof or the District of Columbia that is required to Guarantee the Notes (and thereby become a Guarantor) after the Escrow Release Date pursuant to Section 4.17 shall promptly execute and deliver to the Trustee a supplemental indenture, in substantially the form attached hereto as Exhibit E, pursuant to which such Restricted Subsidiary shall unconditionally Guarantee, on a senior basis, all of the Issuer’s Obligations under the Notes upon the terms set forth in this Indenture. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel and an Officer’s Certificate (upon which the Trustee shall be entitled to conclusively and exclusively rely) to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Guarantor and that such supplemental indenture is a legally valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request (subject to customary exceptions, assumptions and qualifications).

 

SECTION 11.9 Subordination of WillScot Equipment II, LLC’s Guarantee.

 

Anything herein to the contrary notwithstanding, each of the Issuer and the Guarantors, for itself and its successors, and each Holder agrees that the payment by WillScot Equipment II, LLC (“Willscot Equipment”) of all Obligations with respect to its Note Guarantee is subordinated in right of payment to the prior payment in full in cash of all Obligations under the ABL Credit Facility.  The Trustee is authorized and shall take such action as may be necessary or appropriate to effectuate the subordination as provided in this Section 11.9.  No provision of this Section 11.9 shall prevent the occurrence of any Default or Event of Default hereunder.

 

Upon any payment or distribution of the assets of the Willscot Equipment to creditors upon a total or partial liquidation or a total or partial dissolution of Willscot Equipment or in a

 

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reorganization of or similar proceeding relating to Willscot Equipment or its property the holders of Obligations under the ABL Credit Facility shall be entitled to receive payment in full in cash before Holders of the Notes shall be entitled to receive any payment with respect to the assets of Willscot Equipment.

 

Article XII

 

MISCELLANEOUS

 

SECTION 12.1 [Reserved].

 

SECTION 12.2 Notices.

 

Any notice or communication by the Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return receipt requested) or sent by electronic transmission (including facsimile transmission or e- mail) or overnight air courier guaranteeing next day delivery, to the others address:

 

If to the Issuer prior to the Escrow Release Date:

 

Mason Finance Sub, Inc.

c/o Williams Scotsman International, Inc.
901 S. Bond Street, #600
Baltimore, Maryland 21231
Facsimile: (410) 933-5940
Attention: General Counsel

 

With a copy to:

 

Allen & Overy LLP
1221 Avenue of the Americas
21
st Floor
New York, New York 10020
Facsimile: (212) 610-6399
Attention: William F. Schwitter

 

If to the Issuer or any Guarantor on and after the Escrow Release Date:

 

Williams Scotsman International, Inc.
901 S. Bond Street, #600
Baltimore, Maryland 21231
Facsimile: (410) 933-5940
Attention: General Counsel

 

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With a copy to:

 

Allen & Overy LLP
1221 Avenue of the Americas
21
st Floor
New York, New York 10020
Facsimile: (212) 610-6399
Attention: William F. Schwitter

 

If to the Trustee:

 

Deutsche Bank Trust Company Americas
Trust & Agency Services

60 Wall Street, 16th Floor

Mail Stop: NYC60-1630
New York, New York 10005

Facsimile: (732) 578-4635
Attention:  Corporates Team Deal Manager — Williams Scotsman International, Inc. — SE 1509

 

with a copy to:

 

Deutsche Bank Trust Company Americas

c/o Deutsche Bank National Trust Company

Trust & Agency Services

100 Plaza One, 8th Floor

Mailstop JCY03-0801

Jersey City, New Jersey 07311

Facsimile: (732) 578-4635
Attention: Corporates Team Deal Manager — Williams Scotsman International, Inc. — SE 1509

 

The Issuer, the Guarantors and the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders and the Trustee) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if delivered by electronic transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier promising next Business Day delivery. All notices and communications to the Trustee shall only be deemed to have been duly given upon receipt by a Responsible Officer of the Trustee.

 

Any notice or communication to a Holder shall be mailed by first class mail or by overnight air courier promising next Business Day delivery to its address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

 

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If a notice or communication is mailed or sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notices or communications given to the Trustee, which shall be effective only upon actual receipt.

 

If the Issuer sends a notice or communication to Holders, it shall send a copy to the Trustee and each Agent at the same time.

 

Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any notice of redemption or purchase) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to DTC (or its designee) if delivered electronically.

 

SECTION 12.3 [Reserved].

 

SECTION 12.4 Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Issuer to the Trustee to take any action under this Indenture (other than the initial issuance of the Notes), the Issuer shall furnish to the Trustee upon request:

 

(a)                                 an Officer’s Certificate (which shall include the statements set forth in Section 12.5) to the effect that, in the opinion of the signer or signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

 

(b)                                 an Opinion of Counsel (which shall include the statements set forth in Section 12.5) to the effect that, in the opinion of such counsel, all such conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied.

 

SECTION 12.5 Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(a)                                 a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(b)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(c)                                  a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

 

(d)                                 a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied;

 

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provided, that an issuer of an Opinion of Counsel may rely as to matters of fact on an Officer’s Certificate or a certificate of a public official.

 

SECTION 12.6 Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

SECTION 12.7 No Personal Liability of Directors, Officers, Employees and Stockholders.

 

No past, present or future director, officer, employee, general or limited partner, incorporator or stockholder of the Issuer or any of its Subsidiaries, as such, will have any personal liability for any obligations of the Issuer or any Guarantor by reason of his, her or its status as such director, officer, employee, stockholder, general partner, limited partner or incorporator, under the Note Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. Such waiver may not be effective to waive liabilities under the U.S. federal securities laws or other corporate laws, and it is the view of the SEC that such a waiver is against public policy.

 

SECTION 12.8 Governing Law.

 

THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES OF THE GUARANTORS, IF ANY.

 

SECTION 12.9 Consent to Jurisdiction; Waiver of Trial by Jury; Service of Process.

 

The parties to this Indenture each hereby irrevocably submit to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan in The City of New York in any action or proceeding arising out of or relating to the Notes, the Note Guarantees or this Indenture, and all such parties hereby irrevocably agree that all claims in respect of such action or proceeding may be heard and determined in such New York State or federal court and hereby irrevocably waive, to the fullest extent that they may legally do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 12.10 No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

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SECTION 12.11 Successors.

 

All agreements of the Issuer and the Guarantors in this Indenture, the Notes and the Note Guarantees, as applicable, shall (except as provided in Section 11.6) bind their respective successors and assigns. All agreements of the Trustee in this Indenture shall bind its successors and assigns.

 

SECTION 12.12 Severability.

 

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 12.13 Counterpart Originals.

 

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Delivery of an executed counterpart of a signature page to this Indenture by telecopier, facsimile or other electronic transmission (i.e. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.

 

SECTION 12.14 Table of Contents, Headings, Etc.

 

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

 

SECTION 12.15 Acts of Holders.

 

(a)                                 Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one (1) or more instruments (including instruments in electronic, digital or other machine-readable form) of substantially similar tenor signed (including signatures in electronic, digital or other machine-readable form) by such Holders in person or by agent duly appointed in writing (including signatures in electronic, digital or other machine-readable form); and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 12.15.

 

(b)                                 The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to such officer the execution thereof. Where such execution is by a signer acting in a capacity other than such signer’s

 

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individual capacity, such certificate or affidavit shall also constitute sufficient proof of such signer’s authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

 

(c)                                  The ownership of Notes shall be proved by the Holder list maintained under Section 2.5 hereunder.

 

(d)                                 Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

 

(e)                                  If the Issuer shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Issuer may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Issuer shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the outstanding Notes shall be computed as of such record date; provided that no such request, demand, authorization, direction, notice, consent or waiver by the Holders on such record date shall be deemed effective unless it shall become effective (pursuant to the provisions of this Indenture, to the extent applicable) not later than six (6) months after the record date.

 

SECTION 12.16 [Reserved].

 

SECTION 12.17 [Reserved].

 

SECTION 12.18 USA Patriot Act.  In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, without limitation, those relating to the funding of terrorist activities and money laundering, including Section 326 of the USA PATRIOT Act of the United States (“Applicable AML Law”), the Trustee is required to obtain, verify, record and update certain information relating to individuals and entities which maintain a business relationship with the Trustee.  Accordingly, each of the parties agree to provide the Trustee, upon their request from time to time, such identifying information and documentation as may be available for such party in order to enable the Trustee to comply with Applicable AML Law.

 

SECTION 12.19 Force Majeure. In no event shall the Trustee and/or the Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military

 

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disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

SECTION 12.20 Calculations. Except as otherwise provided, the Issuer will be responsible for making all calculations called for under this Indenture or the Notes. The Issuer will make all such calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders. The Issuer will provide a schedule of its calculations to the Trustee and the Trustee is entitled to rely conclusively upon the accuracy of such calculations without independent verification. The Trustee will deliver a copy of such schedule to any Holder upon the written request of such Holder.

 

[Signatures on following pages]

 

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

 

 

MASON FINANCE SUB, INC.

 

 

 

 

By:

/s/ Timothy D. Boswell

 

 

Name: Timothy D. Boswell

 

 

Title: Chief Financial Officer